BAD: Regardless of ISX statements (relying on customers having an AFSL is a weak defence), payment companies have always been liable (both regulation and scheme licence rules) for the actions of their customers. it's an essential element of a properly functioning payments system as they're facilitating transactions. Not new but this judgement makes it even more irrefutable
IMO - ISX is a payments company that has built a fast growing business specialising in providing services at high cost to a grey customer base (can anyone name a single reputable customer of ISX?), customers which are often turned away from the established blue chip banks / payment co's because of the risk of doing business with them and incurring huge fines down the track
GOOD: Established blue chip banking / payment players will be even more risk adverse of this customer group and market opportunities may grow even faster
it's a balance of risk / reward - fast growth, strong pricing, limited competition but regulatory fines / scheme licensing is an existential risk for ISX especially whilst the company is minuscule.
From a valuations point of view, high risk business models would have a much lower multiple e.g. Paysafe before they were taken private would have been on roughly 8/10x for a strong growth trajectory but massively higher earnings. Risk impacts valuation.
ISX Price at posting:
$1.07 Sentiment: None Disclosure: Not Held
