These are a few points I believe we should consider for those who are looking forward to the earning potential and future of ISX.
Consideration 1 –FUTURE PIVOTAL event
26 September 2018 https://www.innovationaus.com/news/54/127/RegTech-2018
Speakers: ASIC, Austrac, ISX, Advice RegTech Consideration 2
31 July 2018 - page 6 of 17 of the ISX ASX quarterly report (excerpt)
Australian Processing Landscape Update– Opportunity and Risks
The Company has also received notification from its Australian supply partner, the NAB (National Australia Bank), that the NAB’s risk appetite has changed. The NAB advises that it intends to exit processing of all High Brand Risk (HBR) eWallets, securities, and CFD, FX trading merchants, except those HBR merchants associated with gambling/wagering, within the next few months.CFD, FX and Securities merchants are classified under Merchant Category Code (MCC) 6211 by the Credit Card Associations, and are AML regulated merchants, but not technically HBR as defined by the Credit Card Associations.
High Brand Risk processing is not a focus by the Company at present, however, transactional banking associated with CFD, FX and securities is a focus for the Company. The NAB exiting this area represents a massive opportunity for the Company, as the NAB has the majority share of processing of these merchants in Australia.
The Company has commenced on strategy to ensure that it can attract and retain merchants in the lucrative MCC6211 category, as well as support eWallets into the future.
The Credit Card Associations however, have contemporaneously issued new rules effective October 2018 that require processing of MCC6211 merchants to be accompanied by geofencing,
age verification, and compliance checks by the payment processor, a function which Paydentity™ is well suited to perform.
The new rules for MCC6211 are effective in both the EU and Australia, in turn giving the Company a strong advantage in the market via its Paydentity™ services.
The incoming Credit Card Association rules, howeverfurther highlight the need for the Company to operate its own fully independent network, as legacy networks operated by the Company’s supply partners will no longer be able to support the incoming Credit Card Association requirements, even with Paydentity™ acting as the interface to the merchant, unless the legacy supplier networks are significantly modified to accept the new data transmission requirements. The Company’s strategy to address the MCC6211 opportunity
includes Principal Membership to the major Credit Card Associations, of which the Company’s Principal Australian Membership to Mastercard, complement
ing our EEA Principal membership, was announced recently. This will allow us to achieve Tier 1 connectivity, thus bypassing legacy Australian
banks and networks, and ensuring we can meet the incoming rules and data exchange requirements directly to each of the Credit Card Associations global
networks. Consideration 3- ONLY ONE EXAMPLE OF A ‘NOT SO RECENT’ ENQUIRY INTO AND OUTCOME FOR ONE AUSTRALIAN BANK
3 – 8 June 2018 – 2 of numerous items published (links below). Other items appear in the Financial Review and the Australian newspapers >1 (more than once).
https://www.theaustralian.com.au/.../cba-says.../f5fed05fa40066ce18af27042878620f
Aug 9, 2017 - Commonwealth Bank chief Ian Narev admits not every problem has been fixed following allegations it breached money laundering laws. ... “We report around four million transaction reports to Austrac each year. ... specialist hub to strengthen its Know Your Customer (KYC) processes; and an upgrade of its ...
Consideration/point 5 – top 20 shareholders have the majority of the shareholding as at 1 August 2018
The Top 20 Shareholders of ISX hold 73.31% of shares on issue.
CONSIDERATION 6 – FROM READING THE LAST 2 QUARTERLY REPORTS
If you are a service provider (e.g. ISX) and are contracted to provide an accurate service within time and budget and a technical issue occurs DUE TO A SUPPLIER which temporarily impacts on your ability as a company (ISX) to provide the stated/and agreed to service to your client/merchant - (previous ISX quarterly states the technical fault is due to a supplier to ISX), then it is wise and prudent for ISX to cover/incur the additional service costs in order to: establish and maintain professional integrity and; provide reliable service delivery to current clients (and reassure future merchants/clients) and proving the company’s ability to deliver their services on time and within the agreed contractual budget.
ISX Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
