Industry Analysts Watching BillMyParents as Firm Targets Substantial Teen Market Growth
(Thomson Reuters ONE) -
In early 201, BillMyParents, Inc. (OTCQB: BMPI.OB) (OTC.BB: BMPI.OB) changed its
name from SocialWise, to better reflect its business focus. The Southern
California based company, which provides payment solutions to teens, young
adults and their parents through its SpendSmart MasterCard is betting big on
targeting one of the most desirable and stable spending demographics, the teen
market.
BillMyParents' recently re-vamped management believes that they are the only
pre-paid card services company solely focused on the special needs of teen
payment solutions and their parents. This focus has the potential to be one of
the fastest growing segments of the pre-paid card industry. The pre-paid card
industry is a $300 billion industry, and is expected to grow to around $400
billion in 2013.
Wall Street has been hearing more about the firm the Company brought on their
new CEO, Michael McCoy who joined the firm after leaving from his position as
President of Wells Fargo's credit card division. Since Mr. McCoy has taken the
helm he and his team have brought on board a strong team of industry experts to
steer the company through an anticipated high growth strategy set to take place
starting now and playing out over the next few years. The management team is
back by a highly experienced early-stage investment team lead by Board of
Directors member Isaac Blech, who put his single largest upfront investment into
BillMyParents, Inc. Companies in which Mr. Blech has been a founding
shareholder now have a combined value of over $35 billion. These companies
include Celgene Corporation and ICOS Corporation.
Since McCoy's arrival, management has been busy rebranding the company, building
the current tool set for the card, and running various beta programs. By the
end of 2011, the company had completed the stress testing of their card systems,
and fully staffed, trained and implemented their customer services department.
While business execution is critical, it appears the management team at BMPI is
focused on quality and service too. Already the company has won several awards,
including the industry's Paybefore Awards Best in Category Winner for Best
Youth/Student/Campus Pre-Paid Program for the SpendSmart MasterCard.
The firm is currently ramping up several key marketing efforts which some
industry observers believe could propel them quickly over the next 12-24
months. BillMyParents' goal is to have 1 million card users within the next 24
months and 3 million card users by the end of 2014.
Todd Ablowitz, president of Double Diamond Group, LLC, a payments industry
consultancy based in Colorado thinks BillMyParents must overcome a couple of
key stumbling blocks in order to succeed.
"Despite recent regulatory changes affecting prepaid cards, the market is
experiencing impressive growth -- particularly for open-loop prepaid cards, like
BillMyParents, that can be used almost anywhere that accepts credit or debit,"
explains Ablowitz. "A lot of this growth is being driven by government and
businesses that are using prepaid cards to load benefits, payroll and
promotions. However, growth is happening in other prepaid sectors as well.
"With teen buying power topping $200 billion, by some estimates, it's definitely
an attractive target market. However, a number of prepaid providers have yet to
crack the code on effectively capturing the teen market. Since the number of
children and teens with mobile devices is on the rapid rise, increased prepaid
functionality tied to mobile may be one key to gaining long-term traction within
this segment."
With light fees, compared to most other pre-paid cards, BillMyParents should
still manage to generate strong revenues. With a monthly fee of $3.95 and a low
load fee of $0.75 per load, as well as ATM fees and use fees from vendors,
analysts estimate revenues per card between $8 and $12/month. At one million
users in 24 months the revenues for the Company could be between $8 million and
$12 million per month or $96 million to $144 million per year.
Potential investors are also paying attention to the fact that several pre-paid
card companies have been acquired for a value of between $400 and $1,000 per
user.
Should BillMyParents successfully hit their goal of 3 million users by the end
of 2014, a projected take-out valuation of between $1.2 billion and $3 billion
may be surmised. Since the teen market is highly desirable, and the data
revenue could be substantial, those factors could come into play during any
take-out scenarios.
The Company currently has a market-cap of around $39 million at the current
valuation, with a potential upside to $3 billion over the next several years.
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Source: Equity Briefing via Thomson Reuters ONE
[HUG#1612359]
Datum: 15.05.2012 - 13:11 Uhr
Sprache: Deutsch
News-ID 146701
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