A stronger than expected adoption of Mint Wireless’ (MNW) mobile payment solutions has helped the company deliver revenue ahead of expectations, but that is not the key reason why investors should be pleased.
The fact is, the clock is ticking for the technology market minnow to secure a first mover advantage as it is facing impending stiff competition with far better resourced rivals looking to muscle in on the fledging niche market to provide ways for small merchants to process credit card payments through a smart phone.
United States-based Square, which was started by Twitter co-founder Jack Dorsey, has already announced that it would be coming to Australia – joining the likes of online payment giant PayPal.
Up to now, Mint Wireless has been unperturbed thanks to the high barriers of entry due to regulatory red-tape. Mint Wireless was inside the castle walls through its partnership with Bendigo & Adelaide Bank and Bank of New Zealand (BNZ), while its competitors would need two to three years to scale the regulatory barriers.
However, the plans by the Reserve Bank of Australia to build an inter-bank hub to make it easier for companies to launch innovative payment solutions in this country threatens to erode Mint Wireless’ competitive advantage. The hub will likely be launched in 2016.
This doesn’t give Mint Wireless much room for error. It will need to establish itself as the market leader over the next 12- to 18-months or it risks being overrun by the attacking hordes.
This is why the 392% surge in revenue to $854,305 for the six-months to end December is significant, even though the total figure is still small. The top-line was more than $300,000 ahead of expectations and management credited the result to the contracts it has signed with BNZ and accounting software giant MYOB.
The contracts enable these organisations to offer Mint Wireless’ solutions to small and medium sized enterprises that are clients of BNZ and MYOB.
Mint Wireless is aiming to get $1 billion worth of payment transactions through its system in the next year or two, which would make it a dominant market player in the niche market.
To cement its leadership position, the company has launched “Mintegrate” – Australia’s first developer platform that would allow others to integrate Mint Wireless’ mobile credit card acceptance solutions into existing mobile applications “in a matter of days”.
Further, Mint Wireless’ solution can handle smart chip and PIN (personal identification number) transactions. Both MasterCard and Visa will mandate the use of chip and PIN in Australia from August this year, and Mint Wireless’ competitors have yet to introduce hardware for such transactions.
The stock was unmoved by the company’s interim results today. Mint Wireless traded at 34.5 cents with 10 minutes left before the market close.
This isn’t too surprising though. The stock has surged from around 2 cents a year ago and a period of consolidation is expected.
Mint Wireless is part of the Uncapped 100.