Big Al:
Nice to see you here. I've been around the investment and brokerage fields for more than thirty years and actively involved in EBPP/IBPP and ESP since their inception. The last and next Killen & Associates studies address the more rapid expansion of the ESP industry versus the EBPP market setting forth the reasons which you could have learned by listening to TLindt.
It is really quite simple. EBPP requires a transmission, the ESP side and a reaction, the payment side. Two things are missing from the EBPP side, a check registry and direct contact with the customer's bank. This suggests that only the most sophisticated of internet users will opt initially to utilize EBPP. Over time this will improve, due in part to the success of ESP, the front end of EBPP.
ESP (Electronic Statement Presentation) is just that, the presentation of such things as financial statements, including brokerage transactions, bank statements, monthly summaries and the like. This form of transmission represents the front end of what you consider to be EBPP. That is the primary reason CKFR bought BlueGill.
Without the presentment side there is little value in the EBPP model. However, unlike the EBPP model, the flexibility of the ESP model essentially turns the cost center of statement distribution into one that not only reduces costs, it has the potential to produce revenues. That is what drove me to invest in INTF after TLindt suggested the company to me. That coupled with the superior, ethical, direct and humble level of managers that I met suggested that INTF was a diamond in the rough. Bob Nero and his team are as competent as any in the field and extremely able to deal directly with the most important part of any business model, their customers.
Imagine getting your monthly bank statement through the internet. Click to save it in your bank file but before you leave the screen notice the imbedded advertising banner or perhaps the offer to invest in a CD or receive stock quotes for free if you sign up for a brokerage account. These clicks are measureable and create revenues for the statement presenter. Not only do they reduce their costs of transmission, they turn the cost center into a profit center.
The sales pitch is that direct as well. Think about it, "Hey client, would you be interested in a product that reduces your costs associated with the distribution of your statements, one that even has the potential to generate revenues for you?" I can tell you first hand that it works and the margins, the residuals and the razor blades are large.
The other thing that attracted me to INTF was its partners. Through ORCL, IBM, ADP, BCE Emergis and Transpoint, they have a flow through of clients, in addition to the hundreds they had through prior provided services, that will just generate a constant flow of revenue-enhancing razor blades. Besides that, they do the front end of EBPP as, we all know, that field will be successful over time as well. The growth however, will be in the ESP market first, which gives further evidence as to why CKFR bought BlueGill.
I go back a long time with Killen and those who work there. They are most understanding of their industry and this upcoming report, which will differentiate the ESP market and its respective more rapid growth potentials, from the EBPP market is one worth reading. It will be available on Monday, February 7th.
This is but one piece of information that will lead investors to INTF. The annual report is in the mail and the plethora of announcements that will follow the release of earnings, or should I say revenues, will further convince the investment community that INTF is in the right segment at the right time with the right product and right team to penetrate the market.
Take care my good man. Nice to see you hanging around. Hope you picked up a few shares or are considering doing so. |
