Daily Price Movement / General Discussion, page-13465

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SlanderJack

1,410 Posts.

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22/06/21

14:11

Post #: 53990513
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I think I misjudged you. But I have to agree with Sebby. Will wait for the full year to come out and let the numbers speak for themselves

Originally posted by SebbyV: ↑

I think the problem you've got however is your 4% input figure. There are a few input variables that will greatly affect this hypothesis:

- We don't know for certain average is 4% - given the makeup of merchants in the US it may well be more like SZL and closer to 5% or 5.5%. I can't prove that definitively, but again I think 4% may be too low.

- We also don't know that average transaction size at non-integrated merchants is $US100 - it could well be $75 for example. If it were, that gets you to 5.3% for all of those.

My guess is late fees are still quite a high % of overall revenue, but like APT over past years, will trend down over time.

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Originally posted by coppergaz: ↑

Open to being wrong here, (actually hoping to be wrong) Please remember this assumes previous discussions on this forum in which seem to be generally agreed that the "convenience fee" is only paid at non-intergrated merchants. (I now have doubts about that and believe it may have changed after zips acquisition)
Also worth keeping in mind as a comparison APT late fees made up around ~25% of revenue just a couple of years ago (now less than 9%)

Looking at 3rd Q update quad has ($US) :
Rev 42.1MTTV 589M
No of transactions 4.5M

Sources of revenue that I know of are :
Intergrated Merchant fees at (3%-6%)
Or
Convenience fees $4/transaction
(as far as I know there is no establishment fee, monthly account keeping fee, or interest)

So my basic logic was to make a combination of what revenue from each of those 2 sources might be and the difference between that and reported revenue should be late fee revenue.

I've done several combinations and when my results were coming up with late fee revenue as an extremely high % of total revenue I skewed the numbers in quads favour to trying find reasonable results.

So here's a few examples

1) Extreme convenience fee example

All transactions at non-intergrated merchants
4.5M transactions × $4 = $18M
Leaving 24.1M for late fees (57%)

2) Extreme intergrated merchant example (I've used Ave 4% fee to match APT)All transactions at intergrated merchants
589M TTV × 4% = 23.56M
Leaving 18.54M for late fees (44%)

So between the 2 extremes the late fee revenue of total revenue falls between 44% to 57%. Obviously a combination of fees is needed and I tweaked the metrics several times to lower the final %.

3) 50/50 example (which implies average purchases at intergrated merchants is higher than at non integrated)
50% of transactions at non integrated merchants (4.5M/2) × $4 = 9M
Plus
50% of TTV at integrated merchants(589M/2) × 4% = 11.78M
Total = 20.78M
Leaving late fee revenue at $21.32M (50%)

I then tried pushing higher number of transactions at non-intergrated merchants, whilst pushing the ttv at integrated merchants to a higher value.

4) 70% of transactions at non-integrated but the 30% of transactions at intergrated merchants making up 50% of TTV.
(4.5M×.7) × $4 = 12.6M
Plus
(589M×.5) × 4% = 11.78M
Total = 24.38M
Still leaving late fee revenue of 17.72M (42%)

Most unrealistic example

Lastly I push 90% of transactions at non-intergrated but the 10% at integrated merchants making up 30% of TTV. Also I pumped up merchant revenue % to 4.5% (higher than APT)
(4.5M ×.9) × $4 = 16.2M
(589M ×.3) × 4.5% = 7.95M
Total 24.15M
Leaving late fee revenue of 17.95M (42%)

In every example late fees being 40% (or higher) of total revenue. I feel I've already swung the metrics in quads favour that any more is just crazy.
If someone can find a realistic example to bring that % down I'd be happy to see it.

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Z1P Price at posting: $8.18 Sentiment: Buy Disclosure: Held
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