So what does the coming period have in store for ISX: ADI...

So what does the coming period have in store for ISX:

ADI Approval in Australia

From Early Q2 2019 (I read that as April 2019 with some wriggle room)

This is a significant goal. It will allow for full Tier 1 infrastructure to be in place in AU in the same way that has been achieved in EU. Full central banking capacity that can be connected directly to the card schemes. It will also allow the EMA account strategy to be replicated in AU.

This will required:

- ADI Licence issued (APRA).
- AFSL issued (ASIC).
- Exchange settlement account issued (RBA).

Update on AU Merchant GPTV book/processed value:

From now to April 2019:

This could be quite a significant announcement when made. We are aware that 3 contracts were recently executed along with 12 further applications having been made. The company advised that it would progressively update on its AU and EU GPTV books separately going forward. The combined book is at $880mil at the moment so will be interesting to see the break down. In a further announcement it mentioned it would report on the 3 executed AU contracts value once processing had commenced (April).

So not sure exactly when we will get an update but I would think no later than some time in April (when AU contracts are expected to start processing). The company may look to report on both the contracted GPTV and then separately on processed GPTV. That way we can see what contracts have moved from integration stage to live processing (revenue) stage.

EMA Accounts GP Contribution Update(EU):

From now onwards

In December the company reported that they had signed up 25 corporate EMA Accounts with an expected gross profit contribution of $4mil. (So approx $400mil in deposits expected).

The company recently updated the accounts figure to 50 but did not change the GP contribution figure. It will be interesting to see if this doubling in accounts translates to a significant uplift in EMA GP contribution. It is possible the company is still processing these accounts and can't provide a reliable estimated contribution yet. It is also possible that these may be sub-accounts /  affiliated accounts of the 25 corporate accounts and therefore won't represent "new" money coming in and therefore are less revenue appreciative. Though remember the company is expecting the EMA Book to be $1.5bil+ by Jan 2020 so this sort of growth in accounts is consistent with that.

Will be interesting to see if we get an update soon. If we do get an ANN I suspect it will be around mid March as that is when we were told that the full SWIFT integration transfer capacity will come online. At the moment I believe that ISXs central banking capabilities are within the SEPA network only and the company has suggested that deposit inflow will increase significantly when the full SWIFT integration in completed. It would be convenient to provide an EMA Book value update coinciding with the SWIFT ann.

Various card scheme integrations:

Mid 2019

The company is stating that they hope to have the outstanding card scheme integrations completed by mid 2019 (AMEX, Diners/Discover, China Union Pay). Membership has been received with all just integration now.

The one that is still oddly unannounced is principal membership with Visa in AU. Visa membership and Tier 1 have been achieved in EU. Possibly Visa want to wait for ISX to have ADI licence etc in AU before signing up?

Complete integration of the services of Paydentity, ISXPay, Probanx and BBS:

Late 2019

The company is hoping to achieve this by the end of 2019 and this represents a new licencing revenue stream. They appear to be hoping to produce a complete start to finish software/infrastructure offering to other Neobanks under licencing arrangement. I believe that longer term they will also leverage their principal membership/integrations with the card schemes and offer Tier 2 arrangements to other Neobanks.

In the mean time it will be interesting how the joint powers of Probanx/BBS progress. It was positive that they achieved their first 'joint' customer the other day.

Flykk Wallet:

Unknown timeframe

We have not heard much about this, other than to find a few documents on the company website. It appears to be a consumer/ end customer offering that is in the works. ISX has stated that they they are focused on being a Neobank for business/merchants. So I think that Flykk Wallet may be something they offer to merchants who will then market it directly to their customers. Looking at the pricing structure on their website it is interesting to note that it is 'FREE' to move money from one Flykk wallet user to another. This to me is interesting as it looks to be a way of promoting/motivating for money to remain within the ISX network and encourage further uptake of internal Flykk accounts. Not sure if these Flykk wallets need to be managed under individual EMA accounts or not. Will be interesting to see if/when we get an announcement about this.


MARKETING/ONBOARDING

NOW!

I believe this is one of the biggest things needed this year from ISX, especially in EU where they basically have their full service up and running now. The last 12 months were probably difficult in this regard as they have only been able to offer an partial service to prospective customers and one that proved to be quite unreliable at times. They also would have had limited room to move with pricing under Tier 2 relationships.

Now that they have a fully integrated Paydentity/ISXPAY/EMA service up and running with Tier 1 infrastructure I believe they have a compelling product to market. Lots of resources should now IMO be put into marketing the product and onboarding customers.

Time for them to fully execute and convert this all into $$$