Here is something I found interesting in trying to understand the rough order and magnitude of what the VISA deal might net for 9SP.
The Bank of America deal 9SP signed back in October 2019, which was mentioned in the recent Stock Doc podcast as commenced to rollout in January, we can see the payment structure and revenue was:
"The implementation fee will be received in three payments by December 31, 2019, and will equate to about 30% of 9 Spokes’ FY19 revenue of NZ$8.2 million."Likewise this was a white label deal - like VISA.
"This follows the announcement of a formal contract with BoA on August 26, 2019, to provide a white-label platform to its small business (SB) customers."However, this is only for 1 bank and its customer base.
"The 9 Spokes white-label platform will provide BoA’s SB customers comprehensive views of their finances and enhanced insights to monitor business performance."
Source:
9 Spokes receives first payment from Bank of America for white-label platformSo what can we assume here? Would 9SP net the same amount of revenue per VISA bank customer, as they roll this out to 15,000 banks over 5 years? If so that makes for a very nice cash cow, and excellent grow projections.
Also what I also found very interesting to note, is the connection between Mr Kevin Phalen, form VISA, and his previous role at Bank of America. He would have left Bank of America well before the 9SP deal was done in 2019 as he departed in 2017. But, with a 9 year tenure, he might have been across the 9SP platform, perhaps even the deal structure .... so can we assume a similar deal structure and size for VISA banks?
We know 9SP has a initial development fee paid by VISA (implementation fee). We do not know about the NZ$8.2M per bank (15,000)
Even if we halved that amount, lets say NZ$4.1M x 15,000 = some huge NZ$61.5B number over 5 years LOL ...
So lets assume 10%, say NZ$800k x 15,000 = NZ$1.2B over 5 years...
Or is there a completely different model here ... perhaps.
But you follow me? Interesting. AIMO and please DYOR...
