CKFR 1/28/97 Conference call notes....from my very rough notes
Pete Kight, CEO, introductory comments:
* ISC Acquisition: Accomplishments:
1. Took out largest competitor
2. Took out shortcut to entry by another competitor (can't buy ISC)
3. Received good revenue stream and key strategic partner
4. Will accelerate entry into business electronic banking, especially with INTU Quickbooks product. Small business software competitors of INTU will be forced to incorporate billpay into their packages to stay competitive. Small business billpay is as large an opportunity as consumer billpay.
* 1.3 million subscribers now
* Very comfortable with estimates of 1.8 million subscribers at 6/30/97
* Accelerating growth expected as Financial Institution rollouts mature.
* 10% qtr over qtr growth in retail subscriber REVENUE
* 10% qtr over qtr growth in retail subscriber HEAD COUNT from EXISTING (pre ISC) CKFR bank client base.
* CKFR is extremely well positioned...strategy of taking the back end position while financial institution takes the "trusted agent" role is key to accelerating growth
* OFX will accelerate consumer adoption....CKFR as market leader will benefit the most
Q&A:
Q: Any integration issues or surprises in ISC?
A: Ahead of schedule. Lost no staff. 18 months to achieve full conversion to single platform. Banks on ISC ARE UNHAPPY with quality. CKFR platform more desirable. May beat the 18 month timeframe for integration.
Q: Progress on percentage of payments electronic versus paper?
A: 40% electronic now. Will reach 50% by 12/31/97. "We have the merchants lined up to make it happen". Reaching 50% electronic will be a watershed event...that will be a huge selling point for sale of electronic bill presentment.
Q: Bank penetration rates for their home banking services?
A: Nationsbank is strongest penetration so far. Wells Fargo good, too. BancOne is in the chute and will roll out this quarter. We expect strong marketing by the super regionals to bring a response and faster adoption rate from the balance of industry.
"When NationsBank comes to town, they will lead with electronic checking"
Q: When is the takeoff point for electronic bill presentment?
A: We have 50-100 merchants that would like to do it today...CKFR is lining up the technology to get it right. "This year is the takeoff point"
Q: Integrion plans for competing?
A: Don't know...They are actively working on middleware to link legacy mainframes and provide customer access solution. Their beta test will include NationsBank and BancOne in Texas. CKFR will get to do the billpay solution in this test. Integrion has announced that they will fully support OFX standard, so CKFR will still be an option, even if Integrion does decide to enter billpay.
Q: Could Bank of America or Citicorp use their volumes to spin out their billpay units and compete with CKFR?
A: Maybe. They have the volume, but no technology. No scale economies. They are maybe 20/80 electronic versus paper. "They lose money on every customer they sign up"
Q: Would Integrion build from scratch in order to compete?
A: Yes. Would take 2 years. CKFR has 2.5 million merchant payees on file, with remittance instructions. CKFR has 1000 merchants with electronic links for receiving payment, and growing. There are no shortcuts in this process.
Q: Do you see Visa Interactive in the market? Haven't heard much from them...?
A: "Don't see them much. Occasionally they will pop up and offer several million dollars of co-op advertising and sign some bank on a cash under the back door deal".
END
For what it's worth :-)
Kurt, any comments or additions?
Brian |
