Cirralto Ltd (ASX:CRO) has inked a key referral agreement with a subsidiary of financial services giant Mastercard Inc (NYSE:MA) in a bid to grow its global payments and cashflow solutions business.
Under the five-year partnership, Mastercard’s Asia Pacific branch will refer its business customers to Cirralto, which will provide a range of trade finance services.
Mastercard (NYSE:MA) can also introduce potential sales leads and business opportunities to Cirralto and will receive a trade facilitation fee for each successfully onboarded customer.
In return, the ASX-lister will hold onto at least 70% of the gross profit margin from each customer contract.
Today’s agreement builds on a business payments aggregator (BPA) deal that Cirralto signed with Mastercard and American multinational Fiserv Inc (NASDAQ:FISV) (FRA:FIV) in December last year.
Cirralto entered a trading halt on Tuesday afternoon in lieu of the Mastercard news and last traded at 5.6 cents apiece.
“A strong validation”
Commenting on the agreement, Cirralto CEO Adrian Floate said: “We are very excited to announce that we have signed an agreement with Mastercard, with whom we have developed a very strong relationship between 2020 and 2021.
“This agreement serves as a strong validation of what we are doing while also providing us the opportunity to potentially access a significant customer base.
“The solutions we will provide to Mastercard customers provide the Company with a fantastic opportunity to rapidly scale its business and grow within Australia and abroad.”
Referral agreement
As part of the Mastercard deal, Cirralto will provide a suite of trade finance, cross border payment and export cashflow solutions for customers at varying rates.
The ASX-listed transaction services business is also responsible for facilitating merchant on record payment services with Mastercard’s business patrons under existing arrangements.
In addition, Cirralto has agreed to provide its payments processing solutions to issue and collect debt — a move it believes will diversify and leverage its revenue-generating potential.
While Cirralto’s operations are based in Australia, the company has the capability to facilitate cross border payments — a key focus of the business moving forward.
Automatic renewal
The new agreement is effective immediately and automatically renews for one year after the five-year term comes to a close.
As is standard practice, either party may terminate the agreement by providing 30 days’ notice.
As part of this agreement, Cirralto permits Mastercard to use any company materials in connection with its activities under the agreement.
Today’s deal comes just two days after Cirralto announced it would formally acquire Sydney-based fintech Invigo Pty Ltd through a binding share sale agreement.
One month prior, the financial services lister also bought its long-term licensing partner, Appstablishment, and incorporated the Spenda business platform with its existing payments solutions.