The EML Payments Ltd (ASX: EML) share price has rocketed up 8.56% after releasing an investor briefing. The EML share price is trading at $3.55 at the time of writing. Formerly known for the high margin activity of pre-paid cards, EML has continued to build out its technology. Alongside the pre-paid card business, the company provides critical payments infrastructure to the fintech industry.
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What is moving the EML share price?
The company has put together an informative briefing pack on performance, technology and future investments. As a provider of Fintech infrastructure, it benefits from the growth of many other companies in this space. Personally, I am not sure that the full impact of this is reflected in the EML share price.
For example, EML has leveraged its technology to provide a range of services across fintech sectors. Specifically, it provides marketplace lending solutions to Moneyme Ltd (ASX: MME) and Laybuy Holdings Ltd (ASX: LBY). In addition, it provides technology for services from mortgage lending, to payments and billing, through to leveraging blockchain.
One of the more interesting applications of the technology is in salary packaging. One company uses cards to distribute pre-tax funds in accordance with government regulations for spend on various merchant categories.
The company reiterated its FY20 headline results, these included a rise in revenue by 25%, along with a rise on net profits after taxes and abnormals (NPATA) of 17%. It also revealed that it has signed 46 contracts in the past two quarters, and has an additional 331 contracts in the pipeline.
One of the forces supporting the EML share price are the barriers to entry across many payment platforms. For instance, in physical cards it has clear technological leadership with both reloadable and non-reloadable cards. As well as virtual payment tools and mobile payments. Consequently, it has enjoyed a 65% compound annual growth rate in earnings before interest, taxes, depreciation and amortisation (EBITDA).
Foolish takeaway
The EML share price has risen by 22% in the past month and could be a great opportunity for investors to buy into a technology growth company with a long runway ahead of it.
It is successfully leveraging its technology for its own products and helping to power fintech companies across a spectrum of services. Consequently, it benefits not only from its own products, but from products across many fintechs.
The company has been able to continue its revenue growth during the pandemic. Furthermore, the company has laid out a technology roadmap with an internal investment of $10–$15 million over FY21 and FY22.
