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Thank you for standing by, and welcome to the Openpay Group Ltd March quarter Q3 FY '20 Business Review Conference call. [Operator Instructions]I would now like to hand the conference over to Mr. Michael Eidel, Openpay CEO. Please go ahead.
Thank you very much, and good morning, everyone. Welcome to the Openpay Limited Investor Conference Call. My name is Michael Eidel. I'm the CEO of Openpay, and joining me today is Andrew Burns, our CFO.I know this is a busy time in market. So I want to particularly thank you for making time to attend today's quarterly business update call for the period ended March 31, 2020. We have 2 sections to the formal part of this call, which will include a business update from me and the financial update from Andrew.To start with, I'd just like to acknowledge the unprecedented impact of COVID-19 on societies and economies and talk about some measures that we have swiftly put in place to protect our people, our business and our merchants and consumer customers at this time. During COVID-19, we have remained strongly engaged with our customers, merchants and consumers, that has needed us most in these difficult times. I want to give some examples to this.Starting with our merchant partners, our focus on supporting them has resulted in strong coverage of essential products and services across all verticals that Openpay operates in, retail, home improvement, health care and automotive. We are very proud of some of the initiatives we have implemented with our merchant partners to make a sincere difference to them and our shared customers. Thus, we have accelerated our integration and onboarding of the merchants for their online business to help them capture their customers' demand for their products, purchasing largely from home. To meet people's increased demand for payment plans in areas like veterinary, we have also accelerated the onboarding of new clinics and practices for medical services.Second, we have been flexible in adapting our product to cope with special needs of our merchant clients. For example, introducing variations of payment claims for car dealers, offering their customers mobile car and tire services.And third, we are also supporting retailers through joint marketing campaigns, pointing consumers to their health and hygiene products, like facemasks and hand sanitizers for the safety of all Australians.On the consumer customer side, we have swiftly responded to their new situations, them spending most of their time at home, many with reduced salaries and some suffering from financial hardship. And we have optimized our credit risk management system to reflect the changing economic situation. Stricter credit rules have been adopted to support our responsible lending approach to ensure that our customers are able to afford their purchases and successfully manage their repayments. And second, we have introduced a number of initiatives for financial hardship situations. As we noted in today's release, there has been an increase in hardship calls towards the end of March, which has been slowed moving into April as governments have started their JobKeeper program -- JobKeeper in Australia and furlough in the U.K.We have improved our hardship process with the introduction of an online processing capability to reduce waiting times for applicants. And each hardship case is assessed on an individual basis. There are several supported options available including extension of payments, deferral of payments and reverse lock fees, which affected people have been very thankful for.We have also been on the front foot to strengthen the fundamentals of the company. A very, very important aspect is funding. Like Openpay is very well-funded with $45.6 million cash and $45 million debt facilities available as at March 31. We have also moved to put in place a series of key initiatives to preserve our strong funding position for an extended period of economic downturn as a result of COVID-19.First, we have put in place a very robust cost reduction program. Our employee expenses have been reduced by 35%, and all other costs have been reviewed to enable the company to operate for an extended period of time without the need for further external capital. I want to take a moment to thank our team and Board, who have all been very supportive to make these changes quickly. I'm grateful of the commitment and loyalty that has been shown through this time.Second in order to limit our longer term receivables book exposure, we have been reducing some longer-term plan types, and we have been working with our merchants to optimize lendings accordingly.Third, our credit risk positioning and fraud prevention technology, which we call Automated Risk Management, ARM, which underpins appropriate customer selection, has been updated with further third-party inputs and will contribute to our strong ongoing risk performance, avoiding unnecessary cash outflow. And last but not least, we will continue to focus on an older demographic, which comes with a healthy risk profile. Our average customer is 39 years of age, and Openpay plans are mainly used as a smart budgeting tool rather than a cheap source of credit for them.In the U.K., where we have been funding our receivables with cash, we are in the final stages of negotiating the terms and conditions of the debt facility to supplement the strong growth of our U.K. business.This brings me to my commentary on our performance during the March quarter. Despite the accelerating global economic slowdown due to COVID-19, we have maintained very strong momentum across all key operating metrics during the March quarter. We're immensely proud that we have been able to announce a new record in both active plans and active customers. Relative to the prior corresponding period, active plans increased by 203% to more than 600,000, and active customers increased by 113% to more than 0.25 million.In terms of active plans, increases were particularly strong in retail, health care and automotive, while also our U.K. business contributed significantly to the record growth with 92,000 active plans. An increase in repeat usage and concurrent plans also contributed to this growth. Already close to 70% of new plans are from repeat customers, which demonstrates that people make it a habit for -- to use our product to manage their purchases for their lifestyle.In terms of active customers, which we have more than doubled, we have experienced very strong growth rates across all our specialist verticals during the quarter. This also confirms the trend of customers using our product, not only within one area of lifestyle, but across our specialized industries, strongly supported by our direct marketing.For active merchant, growth for the March quarter was 63% relative to the previous corresponding period. And we had multiple additions, particularly in automotive and health care. Both verticals are Openpay's, typically sold by non-clinical provider [indiscernible]. Across our verticals, we have seen a recent change in business mix due to the impact of COVID-19 and the Australian Federal government's response. In health care, there has been a decline in dental due to deferred treatments, but a strong increase in veterinary, while people are spending more time at home with their pets. However, as dental diseases and needs are typically cumulative in nature and cannot [indiscernible], we expect strongly accumulated treatment needs post a protective lockdown.Some of the merchants we signed during the March quarter include debt company, Crumpler; optometry business, National Optical Care; and automotive business, pentana. And here an update on Pentana. With Pentana, we announced an agreement to integrate our Buy Now Pay Smarter offering into Pentana's leading car dealer management software, eraPower, which services more than 60% of the Australian car dealer market. The Pentana and Openpay teams have started working on the integration of Openpay into eraPower, and we remain on track to launch in Q4 FY '20, with revenues expected from half year 1 FY '21. This partnership will be even more valuable for car dealers and repairs to offer our product for this essential service and for customers to spread the payment in these challenging times.The March quarter also saw the launch of our new Openpay for business B2B offering with an inaugural agreement with Australia's largest retailer, Woolworths. This new B2B platform provides businesses with a simple solution for digitizing, funding and managing all B2B transactions. It can also help businesses increase cash flow and reduce costs. Our integration project with Woolworths has not been affected by COVID-19. The integration is progressing well with revenues expected from half year FY '21. More strategically Openpay for business adds to our diversification by opening up a large new enterprise market and is scalable across geographies. The potential for B2B continues to be significant, and our discussions with other large enterprise retailers are progressing well.Openpay for business is also the first of a broader product suite for Openpay above and beyond Buy Now Pay Later, which will lead to diversified revenue streams that are less leveraged to our receivables book.As with the build-out and launch of Openpay for business in B2B, we have continued to invest in our other growth capabilities over the past 3 months. A very important one to start with and as mentioned before, we have implemented a new release of Openpay's ARM technology to detect and prevent fraud and improve credit decision. We have experienced a significant increase in targeted fraud over the Christmas retail period reaching into the third quarter, which we have responded to with the release of this new version of ARM. With the addition of a third-party -- of third-party solutions to detect and prevent even more sophisticated fraud [indiscernible] schemes, we have been able to reduce our fraud exposure rates for April already by around 80%.We have also been very excited to launch our new consumer app in Australia in March 2020, making it even quicker for customers to sign up and easier to manage their payment cards. 87% of our active customers have upgraded to the new app so far, and the numbers grow every day. This new app also holds the latest update in our fraud-prevention capability, addressing fraud origination directly at its major source of occurrence over the last few months.Furthermore, we have piloted our new Buy Now Pay Later or Buy Now Pay Smarter product with merchants in new verticals, mainly membership and online education. Our product there will address the needs of merchants and customers in these sectors and will enable us to expand our footprint in areas where we can leverage on our differentiated flexible product.In private schools with very rigid and clunky payment terms and options and the desire of parents to spread expensive school fees over time, perfectly suited for our product. It is expected that the formal launch of Openpay Buy Now Pay Smarter in these areas will occur in the second half of FY '21.Last but not least, we have refreshed the Openpay brands during the period to better communicate our mission and build a persona that is uniquely identifiable. Phase 1 of this refresh saw us unveil our new look across all U.K. Openpay channels and our U.K. app. Phase 2 will see the brand refreshed across Australia and New Zealand.I'd now like to turn briefly to our U.K. business. The U.K. business was a significant contributor to the company's strong operating metrics for the March quarter. Total active merchants grew to 24, and we saw strong TTV growth, not only in our high-volume merchants like [indiscernible], but also in our more recent merchant wins such as Instasmile, House, Hand On Heart Jewelry, [indiscernible]. Our launch with JD Sports has now been confirmed for Q4 FY '20.Despite the macro conditions, it's important to note that our strategy for the U.K. is fundamentally unchanged. Following our launch last year, we continue to grow retail e-commerce with plans to extend to in-store over time. We will also add the specialized verticals of Auto, Health and Home to the mix to follow our successful strategy in our home market and complement our presence in the U.K. and from there into broader Europe.As mentioned before, for the U.K. funding facility, we have made excellent progress working with very respected funders in the market. Completing the U.K. funding facility will further enhance Openpay's balance sheet and funding comfortably and cost efficiently to support the growth of our U.K. business in the long term.I will now hand over to our CFO, Andrew, who will discuss our financial position in more detail.
Thanks, Michael, and good morning, everyone. As Michael said, we've maintained strong momentum across all key operating metrics in the March quarter despite the global economic conditions. Our total transaction value growth continued strongly, up 80% versus the previous corresponding period. However, total transaction value in the March quarter did not quite reach the record high of 95% reported in the H1 FY '20 for 2 main reasons. The first being that the seasonal trading in December quarter was high, driven by Black Friday and Christmas shopping; and the second is that consumers have prioritized their spending on lower value purchases in the current trading environment, resulting in an average 8% lower average transaction value.In ANZ retail, Openpay has observed a shifting mix in channel usage with online business currently contributing 32% of total transaction value and 45% of plan originations versus 7% and 13%, respectively, for the same period last year. Despite this shift, which has also been supported by continued growth of online retail in the U.K., our in-store retail has remained strong, particularly with Bunnings, one of our key merchants.Strong trends remain in total transaction value for April, with an increase of 102% seen in the first 3 weeks of the month versus the same period last year. The resulting transaction value for the first 3 weeks of April has already reached the average monthly total for January through March.Revenues for the first 9 months increased to $13.5 million, up 71% versus $7.9 million in the first 9 months of FY '19, reflective of the continued strong growth in customers, planned volumes and propensity of use. Gross revenue yields, as a percentage of total transaction value, was stable at 12% relative to the same period last year and then up from 9% to the second quarter FY '20. The rolling 3-month net bad debt as a percentage of total transaction value has increased to 4.7% relative to the previous corresponding period of 2.4% due to significant increase of targeted fraud over that Christmas retail period, as indicated previously in the half year update.As Michael mentioned before, Openpay has addressed this by supplementing its existing ARM system with third-party solutions that was released in March. We are already seeing that solution having a positive impact with our fraud exposure rates for April having reduced by approximately 80%, and we expect to see the financial impact of this reduction later in the fourth quarter.In terms of our balance sheet and funding position, we have $45.6 million of cash at bank and undrawn Australian debt facilities of $45 million, giving us close to 9 quarters of available funding. Our strong balance sheet and growth funding positions means we have no near-term need to raise additional equity capital.As Michael mentioned earlier, discussions for our U.K. funding facility continue on a positive basis. The immediate need for U.K. debt funding has diminished as our balance sheet can comfortably and cost efficiently fund the growth of our U.K. business in that near term.With that, I'll hand it back over to Michael.
Many thanks, Andrew. So as you have heard, the March quarter continued on a very positive basis. We continue to differentiate our offering with the launch of our B2B product, investment in our growth capabilities were solid. And once the implications of COVID-19 were understood, we moved very quickly and swiftly to implement a number of important initiatives that will protect our people, look after our merchant customers, our balance sheet and ultimately our shareholders.On a more macro level, we feel very strongly encouraged to pursue our differentiated approach based on our leading technical platform to build out flexible products for merchants across multiple verticals and to focus on finding steady, more mature customers. We are excited to make a difference for our merchants and customers in times of COVID-19 and its aftermath and we are extremely well positioned to drive long-term shareholder value. We look forward to keeping investors updated of our progress.With that, moderator, can we now please open the floor to Q&A? Thank you.
[Operator Instructions] The first question comes from Danny Younis with Shaw and Partners.
I've got 3 questions to start off with. The first one is around the bad debt number. Can you elaborate a little bit further? Is this was what happened around Christmas, more a function of fundamental issues with the ARM technology? Or is it more a function of the increasing complexity and flexibility of fraud schemes out there? Effectively, what I'm asking is, how confident are you that this is unlikely to reoccur?
Thanks very much for the question -- for your first question. Look, I think what we need to acknowledge is fraud will not go away and professional frauds will find new ways to get into systems and take advantage. And then I see our ARM system for -- particularly for fraud risk, but also credit risk and as a learning system where we are confronted with new schemes, particularly from potential frauds and we need to respond. We need to adapt, we need to add learning elements to our algorithms. And this is what we have done. You are right. We have seen some new patterns and schemes of fraud occurring at the peak time towards Christmas, particularly in mass retail, where we see a lot of turnover and have been seeing a lot of turnover happening pre Christmas. And we have seen new schemes, which we have responded to, adding some further third-party providers and they are kind of smart around anticipating and preventing fraud from the source to our ARM system and have successfully launched in March.And what we have said before, having reduced the impact on fraud exposure already by 80% in April, and we continue to refine, makes a huge difference. And I believe we have now done a very important piece to improve the capability of ARM also for the future, but it remains an ongoing focus to observe what is happening and then to respond quickly on the back of these extended capabilities.
Okay. My second question is around the U.K. funding vehicle. Clearly, it seems like you're almost there, given the excellent progress comment you've made. What are the remaining issues still to be resolved in terms of the timing of that?
Yes. Thanks for the question around U.K. funding. I would not say that there have been any issues. What we have seen from the funding providers, who we have been working with towards kind of that around that time a bit earlier, was progressing very well. And what funders then wanted to see in the first weeks of COVID-19 and its implication, how the business and how the book developed to have some data also for that very special period of time and how this translates into our receivables book.And we have been able to demonstrate a very solid continuation of our business in the U.K., also top line, obviously, growing by strong, but also from a credit perspective and also from a fraud perspective, with coming one, informing our debts into the satisfaction, then we are now -- have been going through this extended due diligence. And we are now in the final stages of negotiating the terms and conditions and expect to land a final agreement in due course, which we then will go to market with.
Okay. That's great. And my third question is around your April trading comment of strong growth, which is expected. I'd like to consider that in the broader context of your fourth quarter. Traditionally, retailers, fourth quarters tend to be a little flat or weaker relative to the third quarter Christmas period. Now clearly, you're getting a shift to shorter-term plans, lower ATVs, more shift to online. Can you maybe talk about the -- how you see fourth quarter '20, in general? And with particular mention around any drag from Easter or the lack of a long weekend for Anzac day, because a lot of other retailers have pointed that out?
Yes. Thanks for that question. And what we have seen now as a trend before, but not particularly accelerated through COVID-19 and people being forced to be at home, spend a lot of time at home and purchase at home. We have seen a very strong trend towards people buying online. So while -- from a total transaction value perspective kind of in the previous period last year, online only contributed close to 8%. It has now been already 32%. So what we expect is a continuation of this trend into the fourth quarter. And at the same time, what we have referred already over the last few days that particularly in dental practices and clinics will now open up again above and beyond kind of emergency services.We also expect back into Q4, an increased purchase volume also in Easter, particularly in our specialized industries, but obviously also in retail, which also comes back.So from that perspective, having maybe seen a bit of a flat development in particularly the second half of March, we see already in April that business picks up again, and particularly online very, very strongly. And what we have been always strong at is what has been our initiative with many of our merchants, which also we do and this year starting next week. Openpay in May for our merchants, special initiatives where we have been working and will work with merchants in May to put out their special offers and joint campaigns for our joint consumer customers, driving also total transaction value and revenue onto our platform. So the expectation is that we would see a bit more back to normal in-store, a continued trend -- strong trends in online growth, where we have done a lot over the last period of time. And leading then to a strong overall FY '20 outcome.
The next question comes from Tania Harding with Oak Trust Holdings.
Congratulations on this morning's results. My question relates initially to Woolworths. So the B2B agreement looks as though that's moving ahead. Just wondered if there was any extra sort of commentary you might like to make around that? And then secondly, how that B2B business pipeline is filling up?
Thank you very much. And as you say, Woolworths is, from an integration implementation perspective, currently our focus with the team's Woolworths and our team collaborating very, very closely to implement the solution along the value chain of managing trade accounts, which is quite extended kind of project. To touch on that business process, where we basically take over the management of trade accounts and fully digitize what Woolworths has been doing in manual steps or based on different technologies quite inefficiently. And this is progressing really well. We will see the finalization of the integration towards end of this financial year in Q4. And then -- as we will then have basically taken over the existing accounts and then start to grow with new accounts of business customers. We will then see revenue coming onto the platform. And as we mentioned before, this is, from a portfolio perspective, a very differentiated business with very strong bottom line contribution and strong margins. So we are looking forward to this.And to your second part of the question, how the pipeline needs to be developed. We continue to have these conversations. This is typically a bit more complex than lending and agreement with a merchant for e-commerce, where it's a matter of a few days only to define the plan and then to integrate into e-commerce. In B2B, this typically takes on dispatches on a lot of business processes and technology. So typically, due diligence on both sides, what the best possible way to go is take a bit longer. But as I said before, we continue to have very, very promising conversations in Australian enterprise retail, but also in the U.K., and we'll see more probably early next year.
The next question comes from Robert Pollard with [indiscernible].
My question is, I guess, around the receivables book. So could you give me an idea of effectively what's your recycling rate of the funds in the book is?
Yes. I will pass on to Andrew in a second. But just to position ourselves also what we have called out at recent roadshows, with the kind of the flexibility of our plans reaching from 2 to 24 months, we have a capital kind of churn rate of around 2.4 to 2.8x a year, which sits quite nicely between our main competitor's after pay, which obviously has a higher rate, because they're only offered that 2 months. But we have a higher capital efficiency if you like compared to -- which sits on a lower rate. But Andrew, I guess I'm right with the number of 2.4 to 2.8x a year?
Yes. Yes. Sorry, Robert, well just going to add into that. So our average term within the book is around about 3.5 months at this point in time.
Okay. That's fine. And look, just I'm relatively new with your business. But could you also tell me what the difference between repeat customers and customers with concurrent plan is?
Yes. A repeat customer is a customer, who has been coming back for multiple usages over time. A repeat customer can be a customer who has, at the moment, one plan or multiple plans. While the customer with obviously multiple plans would then be defined in the second category. So repeat could be having only 1 or more, and those with multiple usage have more than one plan with us.
Okay. Okay. So if I -- I'm just looking at your 4c graph -- sorry, sorry to be, let's say, a little bit dumb. So like in the current quarter, you've got 69% customers going from effectively one plan to -- or being a repeat customer. So having gone from having had a plan, gone to 0 and gone to another plan. And therefore, concurrent is people who've got one plan and now have 2 plans or have multiple plans. Is that correct?
That's right. That's right.
The next question comes from Danny Younis, Shaw and Partners.
Just a couple more. Given I'm going through this announcement, there's a lot of detail in there. So thanks for that. That was really good. I noticed you're moving into some new verticals. So memberships and online education, and you're currently in pilot phase. Can you talk a little bit more about those, because they sound pretty promising as well?
Yes. Thanks for that question. And we are really excited about this one. And by the way, it's not only online education wise, school kids are schooled now from home, which is online. This product really ultimately aims at kind of in-school education as much as online education. We're currently working with a couple of schools to exactly kind of flesh out what the best possible product for parents with kids at these school would be. And on the other side, as you may know yourself, the ways and the options, which schools usually offer for parents to pay their term fees are quite clunky and not the best experience. So what we have been doing is we're working with schools themselves and also with parents kind of consumer group research, if you like, to determine what the best terms and conditions and accessibility of the product would be. We've also been piloting as you mentioned, an online education business and have been seeing there how this works. And we find the products of determining the business case in the terms and conditions and would then be ready further down the road in -- probably in the second half of the next financial year to launch.The same on membership, but we have been particularly strongly working together with sports clubs and associations to do exactly the same, to understand what from their perspective, will be required to define a product, which suits best their needs. But also with -- talking with their members, what their kind of typical spending behaviors are and paying patterns and also to refine a product there. Also to be launched in most probably in the second half of FY '21. But two really, really exciting opportunities. And really focusing on the same customer group, which I like, a bit more older, more mature audience, who can afford what their lifestyle truly are and complementing kind of our availability for them and of our availability reaching into schools, into education and other forms of education and memberships.
Excellent. And I noticed the U.K. growth numbers look fantastic. And I just realized that don't actually include JD Sports, because that launch date sort of now fourth quarter. So can you maybe talk about how you see JD Sports once it launches in that fourth quarter?
Yes. It will be -- as you know and as we have talked about before, this is, by far, the most sizable enterprise merchant, which we have been able to win so far. We have now together kind of rescheduled the go-live date for this quarter. So it will happen very soon. I think another order of magnitude of total transaction value coming through onto our platform, we will see a huge increase of customers. And overall, JD Sports has a very, very good demographic from the perspective of our target audience. And what we have been proving here again in the last quarter, then being able to take the strong increased consumer base and cross-pollinate into the other merchant clients, which we have, which is one of the key promises of our business model. We will multiply. And we're very, very excited to launch this, which will be very soon. And ultimately, for us, this was a strategically important as we then have an even stronger sales argument to other enterprise retailers, because the question increasingly also in the U.K. is not only how well we service our merchants, existing customers, but also even more how many customers we can bring with our product to them, which we obviously take from the broader merchant base, which we work with.And with that, JD Sports will also have a strategic dimension of merchant acquisition going forward. We're going forward to winning more of them and obviously then accelerate the scale of our business in the U.K.
And one final one. It sort of goes with that last one. Your gross revenue yield improved from 9% to 12%. So that was a good outcome. How much of that uptick was due to the U.K.? And how should we look at that gross revenue yield across the U.K. and Australia once the U.K. gets the scale like Australia has?
Yes. I'll pass this question on to Andrew. Will you give it a go?
Thanks, Michael. And thanks, Danny. Yes, the gross revenue yield does change with different mixes as they're coming through. Obviously, the U.K. coming on board has had a good impact within that revenue yield. We would expect that as we continue to expand, you will see fluctuations in the revenue yield around that sort of 10% mark that we're looking for. And as we continue to then move the U.K. out of retail and into some of the other specialized verticals, you'll also see another positive impact in the revenue yield.
The next question comes from Leslie [indiscernible].
I got 3 questions. The first one is, I know that your bad debt increased to 4.7% in Q1. Do you think that we have already seen the peak of our bad debt?
Thanks, Leslie. With what I mentioned before, what we have been observing, these kind of attacks from professional fraudsters right into the pre-Christmas and Christmas periods. With the recent implementation of our kind of amended ARM capabilities to detect them for the fraud and its sort of origination. We definitely feel we are in a significantly better spot. And as I mentioned before, with having reduced fraud exposure in April already by 80%, gives me very, very strong confidence that we will be able, and then how it translates then into our book, be able to reduce bad kind of debt from frauds significantly.And as I said before, this is a continued focus area for us to observe what new things come up. But now I think with these third-party providers and their data to enrich our own algorithms, we are strategically on a different level now to anticipate and very, very quickly respond to any upcoming trend. So I can't provide in that sense a forecast, if you like, but my confidence that we are now on a significantly better level with the demo release is definitely there and this is confirmed with the April numbers.
Yes. And you also discussed the -- some of the customers experiencing hardship. Are there any metrics or color that you can share with regard to the overdue payments from our customers? And the trend that we are seeing from March and now into April and May?
Yes. Thanks, Leslie. As I said before, we had seen, particularly at the beginning of COVID-19 and its impact on society and economy in Australia and then also in the U.K. at the same time. Remember, there was a huge level of uncertainty before governments came up with their -- with the support schemes, JobKeeper in Australia and Furlough in the U.K. At that time, people got really, very nervous and called us and they had an increase in this hardship, particularly in the second half of March. Before the government came out in both jurisdictions to support people, which needed help. This has now significantly reduced in -- throughout April. I would not say to pre-COVID levels, but significantly below what we have seen in the second half of March. I also mentioned how we respond. There are customers who call us hardship reasons. Can we approve their needs? We are extending kind of the repayment automatically by 2 weeks. And give them a bit more time. Obviously, staying in very close contact with them to ensure that they are able and willing to repay their plans over time.But if you look at the overall book and the percentage of kind of hardship affected receivables, it has been a tiny bit. And I would guess, our strong focus on the older demographics and people are a bit more affluent, has definitely helped in keeping this well under control. But for us, for those who call us, we take this very, very seriously, and we help them as we can and as we proceed. And this remains now the focus for us over the next period of time as the impact of COVID-19 will prevail. But as I said, to a much lesser extent than before kind of these government schemes had been announced.
Yes. And lastly, I would like to ask about the U.K. business. We've got the customer numbers and also the active plans. Are there any indication on the TTV from the U.K.?
So we have a very rich pipeline in the U.K., which we continue to work through. And strategically, we have very strong focus now on some of the large enterprise retailers with the matters, which I explained before. Because with one, like JD Sports is a very good example, and there are more of those in our pipeline. With one of these enterprise retails, you win a huge amount of the addressable consumer market, if you like, consumer customers and can then develop then along within the retailer. But also then move them into other into other areas along their lifetime needs.So JD Sports is the first one to launch. There are more in the pipeline. They are usually taking also a longer period of time. They are very selective in choosing thereby now paying the provider, but we are making good progress there as well.And we, of course, now continue to reach into the broader market for small and midsize enterprise retailers and what we call the long tail of smaller ones. Continue also to work on self servicing for them to basically go through most of the process themselves before we onboard them. So also more to come on that end to grow the number of merchants in the U.K.
The next question comes from Robert Pollard with [indiscernible].
Sorry, another question is -- I guess there's 2 questions here. One is what sort of transaction volume or value are you -- do we need to get to get to a cash flow breakeven position?
So I'll take that one, Andrew, if you don't mind. I'll start with your first one and then you ask your second one. So we don't provide forecast. And with that, you would not hear from me a precise number. I think that the best way to look at it is maybe have a look at Zip, our -- one of our main competitors in the market in Buy Now Pay Later and how they have developed. And they were probably a few years ago in a similar position where we are at now. Probably we are from a product flexibility and capability in an even more favorable trends. But if you look at them, they have not been able to increase their overall transaction volume, if you like, to more than a billion in order to get to a point of kind of cash flow breakeven.And I would expect, without providing a forecast, that we follow, not the same, but a similar route and could be in a position, obviously, also depending on how the business develops, but would be in a similar position at the same volume of transactions, overall being processed on our platform.
Okay. And I can sort of go through and look those up. And the other one is, can you give us -- or I don't quite understand why in this quarter, like, let's say -- so the question is, what's the interplay between transaction value -- total transaction value and revenue coming in? So transaction value this quarter has fallen, while revenue has gone up dramatically. So what's the trend?
It's usually the kind of the correlation or the connection between the 2 is typically also a matter of mix of business, which we onboard and grow to the respective time of the market. So typically, if you just compare the 2 extremes of our business. Take Bunnings as -- and a few others as large mass retailers, particularly Bunnings warehouse. You see probably more competitive rates also as we are operating in a more competitive space where there are more of our peers active, if you like. And then on the other end, where you see higher value plans, obviously, coming with higher TTVs and higher margins, because we are making a very different industry and service, very different needs, take health care and dental. So that's the kind of the correlation, how the TTV and the revenue develop is real a function of what would be -- within the respective quarter is the prevailing driver of business growth. Obviously, what we have seen, they're growing all in absolute terms. But we see also then in relative terms, some businesses growing more than others, for instance, retail [indiscernible].
There are no further questions at this time. I'll now hand back to Mr. Eidel for closing remarks.
Yes. So this really then forms the kind of correlation between TTV and revenue, the mix of business and what the respective growth had after the quarter. I'm sorry for shortening it here.Any further questions?
There are no further questions.
Excellent. Thank you very much all for participating in today's call. As we have said, and thank you for good questions as well. As we have talked about, it's been performing extremely well in this past March quarter and see our sales very well set up to mitigate safely and strongly through the potentially extended period of time of COVID-19 and its implication on the economy. And our ambition is to emerge on the other side of this crisis as an even better and stronger company. And I think we have seen a first [indiscernible] of the strength at the beginning now of this crisis. And we remain committed to do the best for our customers, consumers and much alike and to add long-term value to our shareholders. And thank you very much for attending the call today.