Dorado Trend Watch Q1 2012
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Dorado Trend Watch Q1 2012

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Quarterly overview of the US EFT industry.

Quarterly overview of the US EFT industry.

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Dorado Trend Watch Q1 2012 Presentation Transcript

  • 1. So, how do you like them apples? TrendWatch 2.0 Q1 2012 Payments System Industry SynopsisNotice: Materials contained in this document are drawn from several media sources and Dorado Industries is not responsible for their accuracy. Opinions expressedherein are presented without warranty. Brand names are the trademarks of their respective service offerors.
  • 2. Random Thoughts “Payments is Payment$!” So, when reading through the literature or watching the high- Amen. Jack Henry & Associates gets it. By separating priced demos of digital wallets offered by Google, Isis, and performance reporting of its electronic payment services unit, others, we wonder what happened to clean and simple? Of the core processor was able to identify the 11 percent revenue course comparison shopping, location based coupons, and in- boost payments brought to the enterprise last quarter. Clean aisle ordering offer lots of sizzle and convenience but are they and simple. really necessary? Might they prove to be use case hurdles that Apparently the clean and simple approach is starting to re- actually prevent reaching the Holy Grail – ubiquitous resonate with others too. When BillMyParents first launched, deployment and acceptance of mobile payments? Just asking. its plan was to disrupt the traditional payments system by “WTF?” Part 2 providing parents with a way to approve or veto a child’s WTF Part 1 was published in TW 2.0 in June 2010 and purchases through an online system, one which had to be questioned the wisdom of selecting the Federal Reserve to integrated with participating merchants’ systems. Now the interpret the flawed logic found in the Durbin Amendment. company resorts to a more traditional approach, a MasterCard- The Fed proved itself worthy of the “Why The Fed?” question branded prepaid card with ATM-disabling and merchant- in releasing its first comparative information package since blocking capabilities. Sure, the online card-less approach had Reg. II became effective in 2011. By applying less than a some sizzle but payments is more of a steak-and-eggs game. bushel of effort in its analysis of full year 2009 data to fourth Then there’s our friends at Bump Technologies and the 80 quarter 2011 findings, the Fed demonstrated its lack of million users of its person-to-person data and photo sharing understanding of the myriad interchange models operating in app that also permitted money transfers through PayPal. Yes, signature and PIN debit networks. No consideration for step- 80 million users in three years is quite a feat. Yet, when the through or drop-through volume pricing tiers, no mention of real money Bump could be making is in payments and that pricing differences based on market segments or acquirer function is buried deep inside a free iPhone app, choosing volume, and no impact analysis tied to small average ticket Bump over another P2P player (Venmo, for instance) becomes merchants and the thumping the got under Durbin. Of course, a bit random. So, to maximize its selection as the P2P app of issuers and the ABA are clamoring for inclusion of proof that choice, Bump has spun out Bump Pay for iPhones as a merchants are lowering prices – which we know from the standalone offering. Again, clean and simple. experience in Australia won’t happen soon, if ever. No doubt there will be a WTF Part 3 commentary soon.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 2Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 3. Table of Contents 2012 Predictions 4 TrendWatch Scorecard/Summary 5 2011 Payments Industry Yields 6 Interesting Quarterly News That Got No Respect 7 Q1 M&A/Investor Activity 11 Useful Links for More Information 17 Back in the Day 18Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 3Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 4. 2012 Predictions • Four new payments schemes designed to maximize mobile phone functionality while eliminating the need for retailer check out lanes will proliferate – two will be launched by merchants, two from third parties. Mar: More entrants in the QSR, fine dining and tavern sector. Waiting on the big box guys. Late add: Intuit acquires AisleBuyer, one of the check out lane disrupters paying between $80 and $100 million. • CFPB or DOJ will put the buy-here, pay-here segment for automobiles and accessories out of business. Mar: Looks like CFPB is using the shotgun approach - 10,000 notices to companies have been issued in the first six months of its existence! Annual report was issued March 31, 2012. Worth a quick read at: http://files.consumerfinance.gov/f/201204_cfpb_ConsumerResponseAnnualReport.pdf • At least one of the top ten FIs will be merged out. Mar: Nothing yet but it’s still early. • Congress will turn its back on efforts to repeal Durbin and/or materially alter Dodd-Frank. Mar: Looks like Congress won’t have to do anything despite certain GOP candidates claiming they intend to repeal Durbin. • American Express will prevail in its suit with DOJ. Mar: The longer the suit continues, the better this prediction looks. • By yearend, China UnionPay’s base of cardholders will be 120 percent of Visa’s. Mar: Could happen. After all, who would have thought AMEX volume would have topped MasterCard’s in 2011? • Nokia’s partnership with Microsoft will save it from extinction. Mar: Nokia’s still in the game and swinging for the fences. Microsoft is trying mightily to make the deal work.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 4Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 5. TrendWatch Scorecard/Summary – Q1 2012 Industry Players To Watch V/MA and EFT Networks: Durbin exclusivity ban now in effect; where the debit volume flows is anybody’s guess. Merchants: The March 2, 2012 WSJ article about merchants wanting to play in mobile payments sounds provocative. Positive CFPB: The 2011 Annual Report covering the first six months of operation is now published. Doesn’t look like there’s a safe harbor anywhere close. Mixed Inuit: Quietly and quickly back on the payments acquisition trail. Negative P2P Payments Leaders: Though not convinced of the P2P business case ourselves, overlooking the plethora of players – legacy payments players toHigh 1. New Payment Forms start-ups – might not be prudent. Virtual Currency Players: Zynga is the leader but keep an eye onLow 2. ATM Restructuring Facebook, PlaySpan, and Zeevex. Unregulated aggregators like PayPal, WU, and Amazon Payments could play pivotal roles in linking cyber andMed 3. POS Volume Trend real world currencies.High 4. Legal/Regulatory IssuesMixed 5. Prepaid Card Growth Market & Industry SituationMed 6. Earnings Announcements 1 – Merchants entering the mobile wallet fray? Times are a-changing. 2 – Mobile looks like its creeping into the ATM space albeit cautiously.Low 7. Industry Investments 3 – Q1 is always slow. Moves by issuers to stimulate volume helped some. 4 – Folks just can’t get over the fiasco left by Durbin; expect more litigation. 5 – Several bankers like the notion of GPR as an option for younger demographics. Let’s see if CFPB or FTC get wind of it. 6 – Early advisories suggest better times are ahead for a few; most will be flat. 7 – Q1 VC funding down 19 percent year over year. Everyone is planning on waiting to see how well the Facebook IPO goes we think.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 5Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 6. 2012 Payments Industry YTD Yields Another great quarter for our basket of payments industry equities! Payments players out- performed the Dow and S&P yet again – well most, anyway. Our two prepaid debit players continue to be Durbinized while just about everyone else out-paced the Dow’s 7 percent gain and the 11 percent uplift posted by the S&P. Then again, Apple closed at $26.25 on its opening day in 1984 and continues to knock the socks off investors as it allegedly flirts with mobile payments. We’ll see. Industry Player 12/31/2011 3/30/2012 Price  Cap Value  YTD 2012 Yield Alliance Data Systems $ 103.84 $ 125.96 $ 22.12 $ 1,316.1 21.3% Cardtronics $ 27.06 $ 26.25 $ (0.81) $ (33.0) -3.0% Discover Financial Services $ 24.00 $ 33.34 $ 9.34 $ 4,491.6 38.9% Euronet Worldwide $ 18.48 $ 20.89 $ 2.41 $ 121.5 13.0% Fidelity National Information Services $ 26.59 $ 33.12 $ 6.53 $ 1,245.9 24.6% First Data (Future Use) Fiserv Inc. $ 58.74 $ 69.39 $ 10.65 $ 1,660.3 18.1% Global Cash Access Holdings $ 4.45 $ 7.80 $ 3.35 $ 258.3 75.3% Green Dot $ 31.22 $ 29.91 $ (1.31) $ (53.4) -4.2% Heartland Payment Systems $ 24.36 $ 28.84 $ 4.48 $ 167.6 18.4% Jack Henry & Associates $ 33.61 $ 34.12 $ 0.51 $ 42.8 1.5% MasterCard Worldwide $ 372.82 $ 420.54 $ 47.72 $ 6,175.0 12.8% NetSpend $ 8.11 $ 7.76 $ (0.35) $ (30.7) -4.3% Online Resources $ 2.42 $ 2.85 $ 0.43 $ 12.8 17.8% TNS $ 17.72 $ 21.73 $ 4.01 $ 100.7 22.6% Total System Services $ 19.56 $ 23.07 $ 3.51 $ 692.9 17.9% Visa $ 101.53 $ 118.00 $ 16.47 $ 13,932.0 16.2% Sources: Company releases, Morningstar.com, Bloomberg.com 2012 YTD yield excludes dividends; based on 12/30/11 and 3/30/12 closing pricesDorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 6Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 7. Interesting News This Quarter Subject Source/Date Substance Tabbedout Press Release • Coming to a table near you, but not too soon. Tabbedout, the startup payments and settlement April provider occupying the bar and restaurant niche has expanded into Houston and the Dallas-Fort Worth metroplex. Tabbedout’s mobile application provides diners and imbibers the option to settle their tabs without handing over their debit or credit card information to a server. All payment information is maintained on the diner’s phone in an encrypted and password protected “vault.” Tabbedout claims acceptance in 400 eating and drinking establishments. Late add: TGI Fridays has announced plans to add Tabbedout to its string of payment options, doubling the startup’s acceptance footprint. Mozido Press Release • Headed by ex-Citibank President and COO, Richard Braddock (also ex-Priceline CEO) Mozido February announces the launch of its Genius Wallet(SM) in support of the company’s string of low-cost, white-labeled financial services offerings. MoneyGram plays a role in the offering by providing access to unbanked consumers wishing to use their mobile phones for payments. Genius Wallet also provides advertisers with a platform for direct-to-consumer promotions. Yet another entrant in the Wallet Wars fracas. Amazon Price Check PYMNTS.com • What to do about Amazon’s Price Check, the bane of big and small box retailers since its launch January in December 2010? Target has launched an effort to “encourage” its suppliers to make and distribute products for the mega-retailer’s sole availability, putting a dent in Price Check’s effectiveness. Time will tell if this and other retailer counter-moves will diminish the consumer allure associated with “showrooming,” by scanning product bar codes to find the lowest possible price. Amazon’s practice of kicking in an addition $5.00 seems tantamount to rubbing salt in merchants’ wounds so there’s likely to be more attempts to thwart Price Check’s effectiveness. Facebook Finextra • The Facebook S-1 filing issued in anticipation of its IPO later this year reads like a science February fiction novel except all of its endeavors in the payments space seem to be based on fact. For instance, Facebook and Bango have inked a deal to provide Facebook users with mobile billing options. Bango is a UK based mobile billing and analytics company founded in 1999 and tightly connected to the major wireless carriers in Europe. On day one, friends will be able to bill their purchases of FB Credits to their mobile devices. Perhaps some day soon, FB Credits could be used to buy mobile minutes? Not that big of a stretch.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 7Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 8. Interesting News This Quarter – Continued Subject Source/Date SubstanceSquare Press Interview • Square, the company that started the merchant services dongle rage for small business retailers wishing to use their iPhones as click-clack devices and avoid the need for a dedicated processor account looks to be stepping it up a bit. COO Keith Rabois told Bloomberg recently that annualized sales volume handled by Square for its merchants is $5 billion. All the sniping over device security has led the company to introduce encryption and market competition has encouraged Square to start moving merchants’ money faster. New timing commitments now result in funds processed before 5:00 p.m. becoming available the next day. This should put some pressure on a few of the smaller dongle players.Plink Press Release • Facebook Credits-based loyalty program, Plink, spurs on the existing movement to establish FB Credits January as an alternative currency. FB users and friends join Plink through Facebook Connect and earn Credits dining out or making purchases at offline retailers. Early players include Dunkin’ Donuts, Quiznos, Red Robin and Taco Bell. Reportedly, there is no need for POS integration and the program is coupon-free. Participating restaurants and retailers pay a percentage of the sales generated by Plink members for the privilege of playing. Bona petit!BOKU Business Wire • BOKU, previously noted primarily for its ability to generate considerable investment capital, takes a February big step into “traditional” merchant acceptance through inking of a deal with WorldPay, the merchant services processor. WorldPay’s merchants may now opt to accept BOKU payments from consumers without credit or debit accounts. BOKU’s payments platform integrates with WorldPay merchant systems to provide a source of carrier billing payments for consumers preferring that route. More pressure on traditional payment methods we foresee.Quepasa Thepaypers.com • If you’re focused on the Latino community, you’re probably aware of Quepasa, a social network and February gaming platform that targets that segment. Quepasa has launched its own Credits program that can be used to by network participants to enhance their status and popularity on the network by attracting viewers to their profiles. Popularity increases are triggered by enhanced profile photographs and messages which can be purchased with Quepasa Credits. Google Checkout (Android users) and iTunes (Apple) provide access to Quepasa Credits which can be purchased in lots from $2.99 to $39.99 depending on the amount of popularity each user is seeking. More cyber bling bought with real world currency.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 8Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 9. Interesting News This Quarter – Continued Subject Source/Date Substance Dynamics PaymentsNews • Here we go again. We ran into an interesting character nearly two decades ago who was trying to launch a April “one card” solution. The card had buttons used to select which debit or credit card the consumer wished to use to make a purchase. It comes as no surprise that a multi-function (“experience” is the way the new player puts it) card would surface again since almost no idea or concept in payments is ever truly ash-canned. This time, Dynamics has introduced ePlate, a dual button payment device which will likely generate the same amount of interest as our old “one card” friend. “Payments is Payment$!” they say but button on a card? Why not use your telephone? PayPal Finextra • PayPal continues to lay down small bets on payments technology. Earlier this year it began a pilot in February Singapore metro stations involving QR codes linked to eight merchant partners. Commuters armed with the PayPal app can scan poster QR codes to learn about the offers being promoted and to purchase goods. Fulfillment can be in-store or by delivery. Barclays Press Release • Barclays launches an interoperable P2P service in the UK. Dubbed “Pingit,” the service enables all February consumers with a deposit account to receive and send money for free by merely using the mobile telephone number. The funds are transferred over the UK banking system’s Faster Payments service – the equivalent of the ACH on steroids. The application is free and available for Blackberry, Apple, and Android devices. The compelling attribute here is the interoperable nature of the offering, something the US has yet to accomplish, PayPal notwithstanding. NetPayment Press Release • Portland, Oregon based startup NetPayment has launched @ONCE, a real-time card-less financial network March designed to link 2,000 financial institutions through an ACH alternative. The service enables online billers and payment processors to verify the existence and status of checking accounts in real time or process debits and credits, also in real time. NetPayment is a bit tight-lipped about the system but if it works as advertised it could be a better mouse trap. MagTek Finextra • MagTek, the world class leader in the field of card and check readers, PIN pads, and the MagnePrint February authentication system, has jumped into the mobile payment terminal fray with both feet. Its new offering carries the tongue-twisting handle of iDynamoEMV and enables credit and debit card acceptance on Apple mobile products with custom mounting brackets and other devices via a mini USB connector. Data security is provided through 3DES and DUKPT key management, as you would expect from MagTek. Mag stripe, EMV Chip & PIN and contactless cards can be read.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 9Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 10. Interesting News This Quarter – Continued Subject Source/Date Substance PayPal Finextra • PayPal has teed up a serious run at Square and other small business payments acceptance organizations. The March new PayPal Here program, powered in part by Card.io, features a small reader that turns any iPhone or Android device into an acceptance terminal. In addition to swipe functionality, the embedded Card.io relationship enables use of a merchant’s phone camera to capture credit card information for immediate processing. PayPal Here pricing is competitive at 2.7 percent which includes a 1.0 percent cash back on eligible purchases. Western Union American Banker • One hundred and fifty year old company Western Union plans to leverage its brand and world-wide network March of physical locations to capture its fair share of the online shopping market. It has launched WU Pay, a system that enables consumers to make online purchases through existing checking accounts or in cash at Western Union agent locations. Early acceptors of WU Pay include Sears, Kmart, Buy.com, Tiger Direct, and others. Based on the eBillme platform acquired by WU in 2011, the service can also be used to purchase virtual gift cards from 60 well known retailers including Home Depot, Dell, and Amazon. WePay PaymentsSource • Online payments processor, WePay, targets the new merchants sector by claiming to be the “anti-PayPal” February firm. WePay enables merchant users to accept debit and credit card payments with almost zero set-up time and absolutely zero set-up cost. On the other hand, there are no discounts for volume offered. Payments functionality is augmented by a merchant portal that provides invoicing, ticket sales, donation acceptance, and selling applications. Merchant funds are held on deposit with The Bancorp Bank. Funds are disbursed through direct links between merchant bank accounts and the Bancorp account or by check. Merchants can use their WePay funds to pay other WePay merchants for goods or services. Pricing is 2.9 percent plus 30 cents – about par for the course. American Express American Banker • The Venn diagram for Wal-Mart shoppers and American Express cardholders would result in a null set in March virtually all cases. However, Wal-Mart has acknowledged the existence of a test involving nearly 200 West Coast stores wherein American Express is marketing reloadable gift cards under the “bluebird” name. Like other Amex prepaid cards, bluebird cards have no monthly fee, one free ATM transaction per month, and a $2.00 fee for subsequent withdrawals.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 10Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 11. M&A/Alliance Activity Buyer/Investor Target Payments Emphasis Possible Strategy Visa TrailPay Transactional advertising Visa joins others to pump $40 million into TrailPay, a five Greylock Partners year old promoter of “free” shopping services for T Rowe Price consumers willing to sit through advertisements for other DA|G Ventures products. Company CEO Alex Rampell claims its Others services have been used by 150 million online shoppers with 2011 posting a seven-fold gain in volume. Sounds like online timeshare sales. Sequoia Capital Stripe Online merchant services Sequoia plunks down the lion’s share of an $18 million Others injection for Stripe, a PayPal wannabe. Ironically, three of PayPal’s co-founders have invested as well. Stripe’s pricing mechanism is straight-forward enough: 2.9 percent 30 cents per transaction. The new money brings Stripe’s capitalization up to $20 million and its imputed valuation to $100 million. Monitise Clairmail Mobile banking and payments Monitise pays $173 million for Clairmail, a key competitor with 2011 revenues of just $18 million. The business combination gives the successor a market cap of $700 million and a two-pronged go-to-market strategy. Monitise systems are integrated with business partners while Clairmail licenses its technology to Tier 1 banks. Google TxVia Prepaid payments technology Google pays an undisclosed amount for TxVia, a technology provider with over 100 million accounts running on its systems. In classic Google-bashing style, most of the reports on this significant acquisition belabored Google’s recent mis-steps and problems surrounding its mobile wallet offering.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 11Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 12. M&A/Alliance Activity - Continued Buyer/Investor Target Payments Emphasis Possible Strategy Accel GoCardless Alternative payments service UK startup, GoCardless operates a new payments system that SV Angel operates using the interbank transfer system in a fashion similar Y Combinator to Iowa’s Dwolla. Three investors put together a $1.5 million round of funding to support human and technical resources expansion. 300 merchants have already enrolled and there’s 1,000 more in the pipeline. Competitive positioning is against the high costs, expiration dates, and PCI compliance attributes merchants face when dealing with Visa and MasterCard. Green Dot Loopt Mobile and loyalty technology Green Dot acquires Loopt for $43.4 million in cash to augment its product offerings and open up new market segments. The logical outcome the marriage of Green Dot’s prepaid card with the mobile functionality developed by Loopt. The Loopt mobile app also bring with it a sense of social interaction. Investors like us Geode Mobile wallet Now this is very cool! Geode is sleeve for iPhones that enables users to load multiple credit /debit cards for making mobile payments. iCache founder Jon Ramaci took his funding needs to crowdsourcing player Kickstarter and raised $195,000 in five days and sold 1,200 units to boot. Let’s hear it for grassroots funding and innovation. Advent International TransUnion Consumer credit bureau Advent International, recently a big player in payments with its Goldman Sachs investments in Vantiv and WorldPay, branches out to acquire privately held TransUnion, one of the US “Big 3” in consumer credit reporting. Now, if the Advent and Goldman folks can get along, this may be an interesting transformation to watch.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 12Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 13. M&A/Alliance Activity - Continued Buyer/Investor Target Payments Emphasis Possible Strategy New Enterprise BOKU Online mobile payments BOKU brings its funding to $68 million with a Series D Associates round of $35 million. BOKU has become an established Telfonica Digital player/enabler in mobile payments and boasts of its strategic relationship with MasterCard (in prepaid applications) and others. DataCard DeviceFidelity NFC technology provider DeviceFidelity, already a strategic partner with Visa in that card company’s effort to roll out an NFC mobile offering, receives an undisclosed amount of funding from DataCard, the secure ID and card personalization company. DataCard will be selling DeviceFidelity’s suite of microSD products to its large FI customer base to enable those bankers to take a position in the mobile payments space. Dallas Venture Partners also took an undisclosed share of the risk by grabbing an equity stake. Existing VC/Strategic ViVOtech NFC technology provider ViVOtech, the RFID and NFC reader company, relies on Investors existing investors to fund $96 million in Series D capital. ViVOtech claims to have shipped one million NFC ready terminals to 500 domestic and international customers. Wonder if the domestic devices will ever get used. Groupon FeeFighters Online payments and comparison Groupon, itself still challenged to reach breakeven, acquires shopping start-up online payments and comparison shopping services provider FeeFighters for an undisclosed price. FeeFighters raised $1.6 million in VC funds in January 2011. This is Groupon’s seventeenth acquisition in twelve months. Now, if Groupon could just make a buck.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 13Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 14. M&A/Alliance Activity - Continued Buyer/Investor Target Payments Emphasis Possible Strategy Western Union eBillme E-commerce WU acquired eBillme in October but kept it quiet until Payments News outed them in December. No word on pricing or what will become of the management team. The brand, however, will go away. Not a bad idea to rebrand eBillme, an also-ran in the online alternatives marathon. eBillme’s share had declined to 2 percent in 2011 Javelin Research estimates. Village Ventures Zipmark Digital checkbook Currently in invitation-only beta, Zipmark enables users to Contour Venture Partners pay bills (rent, in particular), pay friends, or pay paper Others invoices via the web and mobile devices. Investors have ponied up $2 million in VC funds to keep things afloat. The service is a FinTech Innovation Lab finalist in 2011. Pretty clever stuff but “digital checkbook?” Oxymoronic in the extreme. Saudi Prince Alwaleed bin Twitter Text based social network Apparently the prince anticipates that Twitter will one day Talal measure up (or down in one case) to its other significant holdings in Apple, News Corp and Citibank. His investment company drops $300 million into the 140 character info sharing network. Turns out Arabic is the fastest growing language on Twitter (who knew?) and the service was the mainstay protest coordination tool from Tunisia to Bahrain in 2011. Euronet Worldwide PayNet Electronic payments EEFT continues to expand in Europe. Remember when Euronet was named Arkansas Software? PayNet is a relatively small (720 ATMs and 1,700 POS terminals) payments outsourcer based in Romania and recently bought by EEFT. Annual revenues are in the $3 million range.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 14Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 15. M&A/Alliance Activity - Continued Buyer/Investor Target Payments Emphasis Possible Strategy 44 Investors Ready Credit Prepaid card provider Ready Credit Corp. provides Visa and MasterCard branded prepaid cards through self-service kiosk which also can be used for bill payment. Forty-four investors have pooled $2.0 million for working capital purposes. One of Ready Credit’s major products is Access Tap ReadyCARD, used for transit and disability payments in Los Angeles County. Undisclosed investors Scvngr Smartphone payments Scvngr/LevelUp lands $20 million in VC funds to continue with Android or iPhone payments testing in six major U.S. cities. The system is designed for small business and QSR locations using smartphone-to-smartphone communications. Funds settle through BofA. Pretty slick application but one wonders if its scalable. JPMorgan Chase GoPago M-commerce and payments JPMorgan Chase places another bet on m-commerce by services making a strategic investment in GoPago, a northern California provider of m-commerce services to 50 merchants in Mountain View, CA, and the Hard Rock Hotel & Casino in Las Vegas. This approach to m-commerce roulette takes the form of Series A Preferred stock. Chase users of the system will receive exclusive rewards as part of a new loyalty scheme. Oberthur MoreMagic Mobile money transfer Card production giant Oberthur seeks to diversify its play in the market by staking out MoreMagic, a mobile money player with licensed technology residing in 30 countries. Major customers include Barclays, Citi, and others. The move coincides with Oberthur’s TSM expertise in the mobile payments value chain.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 15Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 16. M&A/Alliance Activity - Continued Buyer/Investor Target Payments Emphasis Possible Strategy InComm Medagate Closed loop healthcare benefits InComm makes a diversification play but acquiring Corporation Medagate, operator of OTCNetwork, a national closed loop over-the-counter healthcare benefits payments platform. InComm is a leading prepaid and stored-value gift cards. Green Dot eCommLink, Processor, Green Dot remains aggressive; picks up the corpus of Loopt Location-based deals bankrupt eCommLink for processing oomph and loads up on some very talented marketing and techie-types by paying the aforementioned $43 million for Loopt. This is going to get interesting.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 16Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 17. Useful Links for More Information We threw a lot of new names out again this quarter. Here’s a list of links for you to learn more. Company Role Link Venmo Well funded P2P player www.venmo.com Mozido White label digital wallet www.mozido.com Plink FB Credits conversion player www.plink.com Quepasa Latino social network/payments www.quepasa.com NetPayment B2B/FI ACH alternative www.netpaymentcorp.com MagTek POS and mobile acceptance devices www.magtek.com TrailPay Transaction based advertising www.trailpay.com Geode Mobile wallet player www.icache.comDorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 17Rolling Hills Estates, CA 90274 www.doradoindustries.com
  • 18. Back in the day! Twenty years ago, four U.S. EFT “network commandos” and an Aussie of the same stripe set out to set a world record for marlins caught and margaritas consumed. One record still stands, the other not so much. Regrettably, Rancho Buena Vista, the first Baja East Cape fishing resort opened sixty years ago, is now closed and these payments pioneers have moved on. Jot us a note if the faces don’t look familiar.Dorado Industries (310) 544-1316655 Deep Valley Drive, Suite 125-P jmacallister@doradoindustries.com 18Rolling Hills Estates, CA 90274 www.doradoindustries.com