Daily Price Movement / General Discussion, page-2439

I thought it might be worth reposting this LinkedIn article from Neal Cross 18 months ago. Now add the acquisition of the AI company….should be a winning combo IMO.





Yesterday was a great day for Peppermint Innovation Ltd. Our Filipino business, Peppermint Bizmoto Inc. (PBI) was granted a license to operate as an Electronic Money Issuer by the Central Bank of the Philippines (BSP). A huge leap forward for PBI, our bizmoto service and the value we can add to our customers and partners as we address financial inclusion in the country. This is on top of the financial services license that was granted in July last year that allowed us to offer micro enterprise loans and micro insurance.

The Philippine’s is at the perfect growth stage for us and reminds me of where Indonesia was not so long ago in terms of digital finance. Indonesia today, is far ahead of most countries in this space, with 90% of ecommerce users regularly using digital wallets for payments, either online or in store using QR codes. Of course, Indonesia was the new China, the worlds leader in digital payments and finance.

With Indonesia and China being saturated and highly competitive markets for digital finance, how does that compare with the Philippines?

Well, there is huge upside in the market, with 33 million Filipinos transacting digitally but only 20% of transactions are digital payments. That will change though as the BSP’s vision is that 50% of all retail payments would be digital by 2023. In a country with 110 million people with only 30% having formal banking services, the potential is huge, both in terms of the growth of Bizmoto, but also improving the lives of the underbanked.

With so many ways that disruptors can enter a market, what’s the best model?

The world’s most successful digital banks didn’t start as banks at all, they started as an app with a prepaid card, think Monzo, Revolut etc. It was only much later after they had gained significant transaction before they started to get banking licences. Still today, Revolut operates under an e-money license like Peppermint, they were valued at U$33bn at the last count!

Compare that with disrupters that start as full digital banks with banking licenses, in Australia, many have stalled, sold or failed. Xinja last year had to give back it’s license and close it’s doors due to liquidity issues arising from giving a market leading savings rate but having no lending products to utilise that deposit balance. 86400 sold to NAB bank for U$160m, a good return for its founders and shareholders, but hardly a Monzo or Revolut.

What is the value of a license?

Some time ago I started the process of getting a banking license here in Australia for a neo bank, a RADI, thankfully covid put a stop to that. I was told that the value of getting a banking license in Australia is around U$50m, that’s how much extra your business would be worth.

So this takes me back to Peppermint and Bizmoto, what’s the value of our EMI license? Quite honestly, I don’t know and am not going to spend the time to find out in fairness. It’s not important to us. What is important is that now we can extend our products and services and become not a bank, but bank-like, which seems to be the most successful way to disrupt the finance industry

And we are in a great place as BSP’s decision last December to impose a two-year ban on issuing any further non-bank or bank-owned EMIs to ensure a liquidity-strong digital payments sector, gives us a significant advantage in the market.