$10 Party, page-792

Sorry if someone else has already posted this - but in case it is helpful. Here is some commentary posted overnight for what it is worth:
https://unauthorised investment advice/the-secret-broker/the-secret-broker-zip-a-dee-doo-dah-zip-a-dee-ay/

What the directors of Zip Co have managed to put together is a deal that fulfils their Holy Grail ambitions, plus the potential to bank $200m in expansion capital at a 50 per cent premium to their pre deal share price.

On top of this they have acquired some IP, which takes a new offering to their target demographic, with something which no one else in this sector can currently do.

This little bit of IP, tucked away in their announcement, allows any merchant in the world (online or off line) to become part of their network, without even knowing it or needing to be directly signed up.

The clever founders of the company that Z1P are acquiring, have created a system that allows its 1.5 million millennium customers to pay for anything they choose on a four-week interest free payment plan, at any shop they happen to choose.

They are able to do this as they are the pioneers behind something called a Virtual Credit Card (VCC) and this bit of technology allows for its customers to choose at the time of checkout a direct and normal payment or a four-week interest free payment schedule.

Each customer has a pre-worked out spending limit, so when they do pay for something, the Virtual Credit Card seamlessly comes into play.

The credit card details swapped between the buyer and seller are electronically created on the fly and last for only three seconds.

This little step is how a Z1P client can get to choose their preferred option and then tap and pay in the normal way. If the customer chooses to pay in a normal way, then the Virtual Credit Card is directed to debit their normal bank account/credit/debit card.

However, if they choose to pay over four-weeks, then the payment is debited out of the Z1P account and nothing is physically debited out of their traditional bank account/credit/debit card.

If you think of Flight Centre, when you walk in to buy a trip on a Qantas flight for $6,000, you pay Flight Centre the $6,000 and they pay Qantas directly an amount less their commission. So say they pay $5,800, then the $200 becomes net income before expenses etc.

The technical term for the $6,000 payment is Total Transaction Value or TTV.

When you take this step into account you get to appreciate how the founders managed to create a TTV of $900m, with a staff count of only 91 people needed to service a customer base of 1.5 million people and create a net income of $70m, before expenses.

These types of facts and figure ratios are something that I love to hone into.

91 employees bringing in a (TTV) average of $9.8m each is just orgasmic to the bits of my brain that still control the remaining and non-abused ‘little grey stockbroking experienced cells’ (as Poirot would say).

Now compare the $23.7bn TTV produced in the 2019 full year by Flight Centre with a total head count of 20,000 employees and they produce an average TTV of $118,500.

So, the combined Z1P group going forward will have 468 employees, 3.5 million customers, a TTV of $2.975bn and a net income before expenses of $250m, with an average TTV of $6.3m each.