PPH - PushPay (Church/donor software.)

[BlackPeter]

Just wondering - how much do they need to grow their ACMR of 42.3m to be able to pay not just for 341 staff (well, probably more by now) a handful of really big fat company cars for the execs plus lots of first class travel (for sure you can't travel cattle class when selling to the faithful ...), but to still keep some (hopefully at some stage positive) earnings which accrue to a NPV of NZD $500m (current market cap) within less than biblical time frames? Anybody did these numbers? What are the assumptions in terms of number of customers, monthly revenue per customer, and useful life of the app before the next big fad goes through the faith industry (who knows - maybe move towards telepathie based payment systems or pushing cash might turn into a standard feature of Android 6 or 7?).

I think there is no doubt that PPH will earlier or later reach their XRO, WYN, DIL, PEB or GEN peak ... and sure, some of these companies do still exist (though somewhat downtrodden ...). Not sure I am looking forward to the discussions on the downhill slope ...

Discl: Don't ...

[King1212]

Just wondering - how much do they need to grow their ACMR of 42.3m to be able to pay not just for 341 staff (well, probably more by now) a handful of really big fat company cars for the execs plus lots of first class travel (for sure you can't travel cattle class when selling to the faithful ...), but to still keep some (hopefully at some stage positive) earnings which accrue to a NPV of NZD $500m (current market cap) within less than biblical time frames? Anybody did these numbers? What are the assumptions in terms of number of customers, monthly revenue per customer, and useful life of the app before the next big fad goes through the faith industry (who knows - maybe move towards telepathie based payment systems or pushing cash might turn into a standard feature of Android 6 or 7?).

I think there is no doubt that PPH will earlier or later reach their XRO, WYN, DIL, PEB or GEN peak ... and sure, some of these companies do still exist (though somewhat downtrodden ...). Not sure I am looking forward to the discussions on the downhill slope ...

Discl: Don't ...

it will get there...just matter of time...just sold out...got in couple weeks after oz IPO...then drifted to extremely low....decided to sell for small profit...the sp is on down trend again..gosh....the sp up n down so fast...

[percy]

it will get there...just matter of time...just sold out...got in couple weeks after oz IPO...then drifted to extremely low....decided to sell for small profit...the sp is on down trend again..gosh....the sp up n down so fast...

Like Whore's drawers?

[King1212]

Like Whore's drawers?

Good one percy...yes....slighly better n tighter....

[Baa_Baa]

This point gets thrown around a lot, that PPH will be fine until Apple, Google or Amazon eats into their business. But how do people think this would occur practically? I have Apple Pay on my phone and use it pretty much for everything: the bus, a coffee, clothes. Its currently tag-on tag-off, which could be used via a Kiosk at a church - something that PPH has already implemented and provides the infrastructure for.

I also have three different banking apps on my phone: Barclays, Metrobank and Monzo (London-based). I think the market is so inefficient that it can justify a plurality of interrelated products.

Chasing profit and applicability outside of churches will be the difficult task, that's when I see my exit.

Good question. Pushpay is basically a 'merchant acquiring' business (in transactional banking terms) that when acquired, they clip the faithfuls' transaction payments via the App.

The company has to 'sign up' a church (acquire the merchant) and plug them into closed transaction system, ergo merchant acquiring overheads (sales) and the faithfuls' inability to use the App or payment system outside of the church. The merchant, ergo the church, then encourages their faithful to use the App to make payments. The App which all the fuss is made of is merely the transaction initiator, in as much as payments are concerned. I do note the eChurch extensions which is very clever, to lock in the faithful to the wider church system, which could be very sticky, surrounding the payments business with layers of other service value.

So what makes the PushPay model vulnerable is the overheads to acquiring merchants, ergo the sales effort, in as much as every bank requires specialised sales people to acquire merchants. The closed payment network is also a vulnerability as the App cannot be used outside of any of the merchants PushPay has acquired, which is a minuscule proportion of the merchants that MasterCard, Visa, etc have already acquired.

ApplePay et al bypass the merchant acquiring process completely. They have an App that one can wave at an already acquired merchant, for any goods or services, and the punters credit/debit card is debited the payment and transaction fee. This model is transportable across the humungous global merchant network already established and accepting numerous credit/debit cards.

It is a small step for a church to accept ApplePay 'as well as PushPay', or as an alternative, or any of the other payment Apps, without the overheads of acquiring the merchants (churches), hence bypassing the costs of acquiring or the limitations of a closed payments network. They'll say, thanks PushPay for opening up the church payments market, now here's an alternative payment method that your faithful can 'choose to use'. The same as they use in their everyday purchasing transactions. Choice is the enemy.

Cudos to PushPay for seeing this though, which I believe their response is to envelope the church experience, binding the church engagement and services into the App and diminishing the reliance on just payments. Apple et al will never do that.

Still, it doesn't prevent PushPays merchant acquiring, closed payment network and transactional model (revenue stream) being vulnerable to medium to longer term competition from generic App based payments providers.

[Pricey]

Appreciate your thoughts. I agree, Pushpay needs to push to create a sticky product - a closed transaction system - by enveloping payments within a wider church-based service, as Jinx also earlier pointed out. I just hope this current offering isn’t cost inhibitive for churches, as it would provide the most value.


As I understand it, in relation to Apple Pay as an example, the scenario you pointed out below doesn’t impact PPH at all. Pushpay acquires the Merchant by creating the bespoke app, setting up the church behind the scenes and providing kiosks. Pay wave will inevitably be offered at the Kiosks, but PPH clips the ticket on all transactions that get processed via the Kiosk - the volume aspect of ARPM. Perhaps it has to pay Apple a fee as it does Visa/Mastercard.


This is why i’ll reconsider PPH when it tries to push their product outside of the church system, where there is real choice of other generic payment options.

*I unapologetically decided to use the word Push

[winner69]

Push looking good on this chart from Clare Capital who have plotted NZ techs against the 40% rule

Already in green when he did this chart - be in much higher position now - a star

No worries

[winner69]

and another chart from Clare which takes into account share price (ie EV)

Not overvalued by the looks of it

Sorry about the squiggly circle but I thought I had better hightlight Push being amongst all these AU and NZ companies

[percy]

No surprises there as I note from previous Clare Capital research, that it was commissioned by.....
yes you guessed it.......PPH.

[winner69]

No surprises there as I note from previous Clare Capital research, that it was commissioned by.....
yes you guessed it.......PPH.

They did too
http://clarecapital.co.nz/wp-content...5-quarters.pdf

Push seem to be doing (heaps) better than Clare projected nearly 2 years ago - good eh

Bit unfair tainting Clare about those charts mate - I think pushing/touting Push was the last thing on his mind when he does regular updates of this analysis. The charts are just comparing where a lot of Tech companies stand relative to others - nothing else. IT WAS ME DOING THE TOUTING.