ISX Charts, page-1536

Hi Steve,

Have a listen to JK's interview with Alan Kohler for more detail on this but essentially they have contracted those merchant's that represent that $880mil GPTV to 25% of each merchant's annual volumes.

Now what I understand the situation to be is that when a merchant contracts to ISX they negotiate an MDR% based on what minimum GPTV volume they will direct to ISX. Obviously I would think, the more they commit to, the better/lower rate ISX would offer them. I also understand that if a merchant does not meet their minimum contracted volume commitment then they default to a higher MDR% as a result. So it is in their interest to at least meet the minimum contracted rate.

It appears based on the Kohler interview those initial merchants contracted 25% of their volume to ISX.

So, yes it is possible (and quite likely based on results to date) that merchants are processing above their minimum contracted 25%. Merchants will always have more than one acquirer to direct their traffic to (as a risk mitigation in case their primary provider's network had an outage) but obviously the plan is for ISX to seek to become the primary acquirer for these merchants (given ISX are offering a complete and tailored solution for them) and if they become primary then I guess you would expect them to begin receiving well north of 50% of a merchant's traffic.

We are obviously not sure what terms the additional 60 odd merchants have agreed to.