COOP app goes live but the revenue figures will have to scale massively to make a significant change in cash flow. Although having 181K members currently only 18K active app users. Currently in first 4 days 2.5K users made 1.1K transactions of which PIL gets 10c per transaction so $110. So if 50% of members sign up, 90K users @ ~80K transactions / week = $8K / week revenue for PIL or $400K/ year. Cash burn for last year was $3M. However if it proves popular the potential coop membership of 3.4M @ 50% uptake on the same number of transactions would give an annual revenue of more like $7.5M so plenty of potential but the roll out has been slow. The mobile phone top up integration could help.

Key milestone with MASS-SPECC, integrating the mobile platform of one of their leading Cooperatives in the Philippines with the Pinoy Coop Mobile (PCM)

Tagum Mobile ‘goes live’ with both Android and iOS launch of the PCM wallet. Tagum Coop is a significant cooperative in Mindanao and yet is just one of MASS-SPECC’s 360 cooperatives representing some 3.4 million members who are the target users of the PCM app.

bizmoto-powered PCM digital wallet will enable Tagum Mobile users to perform real-time fund transfers from their ATM accounts to the PCM wallet via Instapay

Tagum has 181,196 members, more than 100,000 mobile app downloads, 40,000 ATM card holders and over 18,000 active mobile app users

Peppermint initially targeting Tagum active users and ATM card holders

Peppermint earns approximately 10c per transaction

Tagum has requested additional integration of Peppermint e-load services to offer mobile phone airtime top-ups directly through their app to all users

“At this early stage we are very encouraged by the strong user adoption of the PCM wallet embedded in the Tagum mobile app. Within only 4 days since iOS and 18 days since Android launch, we have already 2,568 registered users, who have conducted 460 fund transfers via InstaPay valued at circa AUD$37,000, and 680 ATM to Wallet transactions valued at circa AUD$40,000.

Acquisition winning contracts. $525K over 12 months. $1.1M was raised at 1.5c. CPS Capital takes 6% fee and 15 M options @2.25c comes on board for $5K a month for 6 months as an advisor. Half year loss of $1.6M so still likely to need to raise further this year.

Peppermint Intelligence Limited ("PINT") secures several key artificial intelligence ("AI") and customer experience ("CX") contracts since being acquired

Globally recognised Amnesty International extends 9-year working relationship

Informa Connect, World Television and Action Against Hunger renew specific project contracts

Combined value of contracts secured worth more than AUD$525,000 since December '23

Contract terms vary from 2 to 12 months with revenue to be recognised monthly as work delivered across the various projects PINT developing groundbreaking AI-driven platform aimed at matching and monetising people's skills and experiences with those needing help

Acquisition of PINT's AI and CX team has allowed Peppermint to leapfrog years of development in building similar capabilities, methodologies, frameworks and outputs from scratch

Peppermint is actively building PINT's AI and CX capabilities into its business operations

"Peppermint acquires exciting AI Business." Bought for £1 but with a commitment to fund the ongoing running costs@$160K /month from ASX listed XPON. Not enough revenue to cover costs surely or they would have sold it for more. Capital raise must be coming despite their protestations about no change. Could significantly improve scalability of the platform.

The AI & CX team has been instrumental in leading significant digital transformations and integrating advanced AI capabilities into various renowned businesses in the UK.

"It generated revenues of circa $5.5 million (GDP 3 million) in FY23 and by acquiring this seasoned team, Peppermint is effectively leapfrogging years of development in building similar capabilities, methodologies, frameworks and outputs from scratch to focus on the Company's business going forward.

"We plan to integrate the AI & CX team into our existing technology operations during the next 6-12 months. This integration will not only enhance our technological delivery capabilities but also allow us to consider cost optimisation and specilisation across our technology teams, ensuring a more efficient overall structure.

"This will enable us to accelerate our AI transformation across loan origination, scoring, management and collections to deliver on our vision to become a leading automated lending business to the financially underserved.

"Additionally, the existing client base of the AI & CX business division provides an immediate offset to the costs associated with the team. It also offers Peppermint the opportunity to deploy any under- utilised resources within our core business for billable work.

The AI & CX division:

The AI & CX division builds and deploys modern applications and an optimal customer experience utilsing AI tools to enhance the user journey. The division develops applications and then offers a managed service subscription to maintain, enhance and upgrade them. The aim of this process is to use data and technology to create a highly personalised, financially rewarding and compelling customer experience.

The AI & CX team includes 19 highly skilled professionals across the United Kingdom, Australia and Vietnam, covering management, sales, finance, operations, delivery, customer experience and technical engineering. The core 13-member Vietnamese technical development team includes AI engineers experienced in handling small and large-scale AI projects, full-stack developers, CX experts (specialising in designing user journeys that leverage AI driven personalisation and recommendation strategies to drive conversion and retention), product managers, and quality assurance managers. The team has a proven track record of selling, delivering and scaling high-value solutions.

Peppermint plans to integrate this established and proven team into its existing business to drive improvements across its own technology platform, optimise current technical development programs and deliver a premium customer experience to drive user engagement. The ability to enhance the uptake and efficiency of the Peppermint platform with a sophisticated CX and AI in-house team is exciting.

Some thoughts from HC

“XPN have stated that the divestment will result in revenue and expenses reducing by approximately 15%.

Their revenue for FY23 was $15.07 million so it appears PIL will be taking over about $2.26 million of that income stream. That compares quite favourably to PIL's claim that monthly operating costs will be $160,000 per month ($1.92 million per annum). So the XPN division that is being acquired appears to be in operating surplus by about $340K per annum.

Offsetting that, however, will be higher corporate costs (ie audit, compliance etc) due to having a UK subsidiary - assuming it cannot be relocated.

XPN expenses for FY23, including depreciation but excluding one-off restructuring costs, were about $18.42 million. So, according to them, the 15% reduction in expenses for XPN will amount to about $2.81 million. PIL will be taking over all but $890K of that as operating costs (ie $2.81 million - $1.92 million).”

Two certifications that allow PIL to clip the ticket on electronic transactions within the Bizmoto app, previously provided by athird party. SP up 33% at time of writing albeit off a very low base.

Peppermint Managing Director and CEO Chis Kain said: "The BSP's certification of our operations is an important milestone in Peppermint's strategy to fully leverage our Electronic Money Issuer ("EMI") licence and use it to drive revenue growth via increased transactions across the bizmoto platform."

By way of some comparison, a Philippines mobile-App based platform with an EMI licence called Coins.ph was sold in early 2021 for US200 million, after having been purchased by Gojek for around US$95 million in 2019."

"Peppermint has a commercially proven, deployed and growing mobile-App based ecosystem in the Philippines which is underpinned by a Finance Company Licence and an EMI licence. We are currently valued at circa AUD$13M."

Peppermint Bizmoto Inc. ("PBI") issued with Certificate of Registration ("COR") as an Operator of Payment System ("OPS") by the Bangko Sentral ng Pilipinas ("BSP")

• Certification allows PBI to be listed among the BSP's 'approved and supervised' Operator Payment Systems throughout the Philippines, providing a safe, efficient and reliable payment and settlement system for its Bizmoto users

• PBI issued with Certificate of Eligibility ("COE") by the BSP for direct membership with the Philippines Payments Management Inc. ("PPMI"),

• Certification allows PBI to join PPMI in the PESONet and InstaPay Automated Clearing Houses ("ACH") as a Sending and Receiving Participant under the National Retail Payment System ("NRPS") of the Philippines

PERTH, AUSTRALIA, 27 SEPTEMBER 2023: Peppermint Innovation Ltd (ASX: PIL) ("Peppermint" or "the Company) is pleased to announce its 100 per cent owned subsidiary, Peppermint Bizmoto Inc. ("PBI") has been issued two vitally important bank certifications by the Bangko Sentral ng Pilipinas ("BSP").

The BSP, which is commonly referred to as the Central Bank of the Philippines, has issued PBI with a Certificate of Registration ("COR") as Operator of Payment System ("OPS") and a Certificate of Eligibility ("COE") for membership in the Philippines Payments Management Inc. ("PPMI") allowing direct connection to the PESONet and InstaPay Automated Clearing Houses ("ACH") as a Sending and Receiving Participant under the National Retail Payment System ("NRPS") of the Philippines.

The critical certification provides for PBI to be listed among the BSP's 'approved and supervised' Operator Payment Systems throughout the Philippines, providing a safe, efficient and reliable payment and settlement system for its bizmoto users.

It also allows PBI to operate its payments platform outside of its closed loop of bizmoto users and ensures that its role as a payment service provider to small banks, organisations, transportation services and any other community group delivers quality payment services via bizmoto.

First signs of revenue from granting of the EMI license projected to be 4 months out. Clipping the ticket on transactions from up to 1.6M members of the Philippines' largest regional cooperative federation.

PIL has signed a five-year exclusive agreement with the Philippines' largest regional cooperative federation - MASS-SPECC Cooperative Development Center ("MASS-SPECC") - for its 1.6 million members to use Bizmoto's Electronic Money Issuer (EMI) financial services.

This agreement allows MASS-SPECC to launch its own digital transformation program via their PinoyCoop App where Bizmoto provides MASS-SPECC member-users access to EMI financial services such as transferring money from a co-op member's Bizmoto wallet to another bank account via InstaPay or PESONet.

Additionally, Bizmoto's EMI financial services will provide a convenient and safe means of completing 'cash-in' and 'cash-out' transactions aside from MASS-SPECC's Automatic Teller Machines ("ATM"). In 2021 alone, MASS-SPECC's ATM cash-outs accounted for almost two million transactions or an average of 166,000 transactions per month. The two million transactions were attributed to only circa 380,000 ATM card holding members of MASS-SPECC's 1.6 million individual members.

MASS-SPECC co-op members will also be able to access Bizmoto e-wallet financial services such as bills payment, including the collection of payment for local billers, electronic load and the release and collection of co-op loans.

Technical planning, development and integration is currently underway with services to commence within the next four months.

Peppermint will receive an integration payment of circa $40,000 and earn on-going fees on a revenue share basis for each transaction, dependent on the service performed, which at this stage cannot be quantified in terms of materiality.

Following a trading halt PIL has announced being invited to partner with Visa as part of Visa's FinTech Fast Track Program. Interesting to see how the market responds. At the moment helps PIL by providing payments outside of its system and ties in revenue for VISA in the Philippines. Can't see it having much traction in AUS but could have a place with the many migrant workers in Singapore and then elsewhere that do not have local banking access.

PIL has signed an exclusive five-year agreement with Visa allowing Peppermint to significantly expand its digital financial offering around the world, focussing initially on the key markets of the Philippines, Singapore and Australia.

Under the partnership agreement, Visa has an exclusive right to provide Peppermint with credit, debit and prepaid cards in the Philippines, Singapore and Australia for a period of five years during which time Visa will also provide Peppermint with financial incentives to assist with marketing costs, licencing and implementation fees, and ongoing issuer fee rebates (we note these incentives while important are not at a level material to the Company's operations). Visa's Fintech Fast Track Program will allow bizmoto users to fund a Visa debit or pre-paid Visa card directly from their bizmoto wallet, which will significantly enhance their cash-out capabilities and allow them to use Visa's significant global payment infrastructure. Peppermint will also be able to issue a Visa debit or pre-paid Visa card linked directly to its bizmoPay program and products, thereby empowering recipients to make regular e-commerce and online transactions.

Visa's Fintech Fast Track Program provides companies like Peppermint with the ability to access Visa's growing partner network, and experts who can provide guidance and resources to support their initiatives as they scale.

Peppermint plans to start issuing Visa debit and pre-paid cards to bizmoto users in Q1 next year subject to the on-boarding and system integration timelines of Visa stipulated third-party partner companies.

Peppermint's Managing Director and CEO Chris Kain said: "Being invited to sign up to Visa's Fintech Fast Track Program gives Peppermint an edge that we've never had before - the ability to issue a debit card or pre-paid card directly linked to a bizmoto wallet. "We also have the ability to issue Visa credit cards to our bizmoto users but we want to initially focus on the issuance of debit and pre-paid Visa cards. "Visa provides ultimate payment interoperability across the globe for our bizmoto users which we believe will retain and attract significantly more bizmoto App users and consequently, more bizmoto App downloads.

"Peppermint believes that partnership, collaboration and investment are keys to creating new and innovative solutions. We are excited to be partnering with Visa to empower the bizmoto user experience and enhance our bizmoto platform functionality, and we look forward to accessing their experts and vast resources as we grow our business throughout the Asia Pacific region. "Our partnership with Visa really does take our bizmoto wallet global.

The potential financial impact of this cannot be estimated at this time." Credit / debit card growth in the Philippines Card payments in the Philippines are forecast to increase at an annual rate of nine per cent to hit P2.8 trillion ($55.7 billion) by 2025, according to leading UK data and analytics company, GlobalData.1 GlobalData predicted card payments would grow by 11.6 per cent in 2022 alone, to reach P2.2 trillion ($44 billion), up from P2.01 trillion in 2021. Of the forecast P2.2 trillion in 2022, P1.3 trillion will be through credit and charge cards while the remaining P945.8 billion will be coursed through debit cards. This represents an 11% growth for credit and charge cards and a 12.4% hike for debit card payments. The Philippines has traditionally been a cash-based economy due to the high unbanked population, inadequate banking infrastructure, as well as limited public awareness of electronic payments. However, recent initiatives adopted by the Government of the Philippines have resulted in a significant rise in card payments during the past few years. These initiatives have included the provision of better banking infrastructure as well as the Central Bank of the Philippines passing a regulation to cap credit card interest rates and the level of interest that can be charged on credit card instalment plans

Despite PIL being granted the EMI licence this quarter the revenue is still a way off. Revenue does not even cover product manufacturing and operating costs. $5M cash at hand. Agent growth but only 4K downloads of the app and agents/ riders no growth. The next half will be important in proving/disproving the platform business model. Large market but needs to gain traction. Interesting to see if the financial education app can help achieve growing customer numbers. White label mobile banking solution could help revenue.

"With these final requirements all but completed this week, we expect to launch our EMI pilot program this quarter, provided that our chosen communities and program partners are able to meet an agreed timeline.

"And finally, the Company is also in discussions with a global digital payments provider with respect to a strategic partnership and I look forward to providing further updates to our shareholders and the market in relation to these negotiations shortly.

The EMI licence will significantly extend Peppermint Bizmoto’s opportunity to reach microentrepreneurs and provide digital payments for their businesses. They can also apply for bizmoPay loans, as well as purchasing bizmoProtect micro-insurance policies and future bizmoto platform products and services.

A targeted marketing campaign saw the number of registered bizmoto agents grow in the June quarter to a total of 63,337 agents while the total number of bizmoto App downloads continued to rise, up 11% to a total of 4048 downloads for the June Quarter. The number of registered merchants remained at 748 while the number of registered BizmoGo riders also remained steady at 672.

To strengthen the bizmoto offering, Peppermint is progressing the development of a financial education App - to be called bizKarte - that aims to help improve the financial understanding and wellbeing of both agents and the wider Filipino community. The standalone App will deliver learning content across several areas including (i) Savings, (ii) Investments, (iii) Household bill management; (iv) Budgeting; and (v) Small business management and is aimed at attracting new consumer-focussed clients to the bizmoto ecosystem.

The Company is now at varying stages of commercial negotiations with at least five other banks around the implementation of Peppermint's MBS services. It is currently assisting these banks to assess their technical requirements to join the BancNet server in order to successfully onboard Peppermint's MBS services.

Held in SM

PIL integrates with major payment platform (live Q2) to provide transfer route into the the Bizmoto system for the non bank clients that the platform targets.

• Peppermint signs key bill payment agreement with PayMaya Philippines, Inc.

• bizmoto classified as a 'biller' on the PayMaya technology platform

• Agreement makes it easy for bizmoto agents to 'top-up' or 'cash-in' to their bizmoto mobile wallets

• PayMaya has 26 million registered App users and a network of 55,000 'Smart Padala' partner agents across the Philippines.

Peppermint, this is yet another step in trying to integrate and become completely interoperable with the payments landscape in the Philippines and, most importantly, make the process for our bizmoto agents to cash-in to their bizmoto wallet as frictionless and seamless as possible.

"Our aim is to have all the necessary technical and system integration complete to enable a first phase 'go-live' date in Q2 this year.

SP back at lows well below the CR and no good news in the quarterly. Lockdowns have affected roll out in the Philippines. Revenue down.

Only highlight is progress towards EMI.

All required documentation for Stage 3 has been submitted and on January 24 the Company delivered an in-depth system demonstration to the Bangko Sentral Ng Pilipinas (BSP) who are assessing Peppermint's EMI licence application.

PIL has moved off its lows quite significantly it will be interesting to see if this is a catalyst for wider interest.

The Company has chosen to extend the indicative settlement date by seven days to allow it time to fully assess a potential new, strategic investment partner.

PIL placement and progress to Electronic Money Issuer (EMI) License. Continued progress to revenue and growth

• $4 million committed at 2 cents per share in placement

• Funds will progress Electronic Money Issuer (EMI) Licence application and commercial roll-out of bizmoPay loan service

• Notice of Eligibility to proceed with Stage 3 of Electronic Money Issuer (EMI) License application received from Bangko Sentral Ng Pilipinas (BSP)

• EMI licence will allow any Filipino to use the bizmoto platform to receive digital money and access digital services

• Company to conduct a bonus option issue to existing shareholders

• Phase 1 commercial roll-out of bizmoPay underway

Peppermint launches bizmoPay commercial roll-out

Up to 1,000 micro-enterprise loans expected to be issued across the loan portfolio during next three-month period

This will be the test of whether the company can be successful. If they can hit this target and get the Electronic Money Issuer (EMI) licence then I would hope to see a significant rerate.

29% rise today on the back of the following : Peppermint signs significant agreement with Dragonpay

Highlights

• Peppermint signs cash-in, fund transfers and payments agreement with Dragonpay, one of the Philippines' largest and most reliable online payment gateway platforms

• Agreement provides one-stop payment gateway, connecting the expanding bizmoto network to a significant number of online and over the counter cash-in and payment channels throughout the Philippines

• Implementation planning will commence soon with a target 'go live' date in Q1 2022

Peppermint's engagement with Dragonpay will allow the bizmoto platform to become a merchant within the Dragonpay platform and, consequently, provides immediate access to its massive network of banks, EMI-wallet providers and remittance/payment centres to undertake cash-in, fund transfers and payments. Essentially, Dragonpay is an aggregator of cash-in, fund transfers and payments services and will be a major enabler for bizmoto agents, riders and merchants to conduct transactions.

The Dragonpay agreement will immediately connect bizmoto to a raft of major commercial banks such as BDO, Metrobank, Unionbank, UCPB, Landbank, Bank of the Philippines, RCBC, Eastwest, AUB, Chinabank and Robinsons Bank - a task that would have taken significant time and resources to achieve individually.

Peppermint does not earn direct revenue from the agreement but will earn a system fee for every transaction that is made across the bizmoto platform. The system fee is not set and varies depending on the trading exchange used. The system fee earned by the Company varies from a flat fee basis to a percentage of the transaction value. At present, the Company earns up to 6% of the transaction value on most transactions across the bizmoto platform.

This agreement is for an initial one-year term and renews automatically unless either party gives 30 days’ notice not to renew.

PIL’s trial has been positive. They continue to make progress towards a solid financial platform however Covid has had a big impact on the Philippines and therefore PIL.

September quarterly cash receipts of $472,000 - representing an 83% increase on June 2021 quarterly cash receipts

Strong cash position ending September Quarter with $2.7M cash at bank

Loan participants have demonstrated - based on analysis of pilot program data - an average eight-fold increase in their level of transactions across the bizmoto ecosystem of services

 Increased numbers of registered bizmoto agents to 56,605, bizmoGo riders to 672 and Merchants to 747

Next commercial phase of bizmoPay allowing recipients to apply for micro-loans via their bizmoto mobile App expected to be rolled-out next month

"On average, the total number of loan recipients completed 13 transactions during the first 45 days of the bizmoPay pilot program, yielding $1.05 per day in transaction value. That volume of transactions would represent an additional circa AUD$22 million per annum in revenue if extrapolated across our 56,000 registered bizmoto agents.

Progressed application process for Electronic Money Issuer ("EMI") licence to Stage 2

"An EMI licence will allow us to facilitate any e-money transaction and service open-loop e-wallet accounts, providing all Filipinos - not just bizmoto agents - with a convenient and secure way to receive digital money and access digital services.

"Every Filipino will have the chance to receive a bizmoPay loan, paid to their bizmoto e-wallet to access the bizmoto ecosystem and agent services. We believe this will stimulate significant transaction volumes over the bizmoto platform." 

The COVID-19 pandemic continued to impact the Company's bizmoto operations during the September quarter, with stricter lockdown measures imposed in Metro Manila and some other areas due to escalating cases of the COVID-19 Delta variant. The stricter lockdowns have disrupted consumer spending and adversely impacted many segments of commercial business.

Having lived in Indonesia and seen the explosive growth of Gojek from a bike share service to a deliver anything and any service plus payment platform monster I can see the potential in PIL.

The question is whether they can secure enough growth before the big players like Grab and Gojek move in.

https://stockhead.com.au/stockhead-tv/90-seconds-withchris-kain-peppermint-innovation-asxpil/

“Peppermint was recently granted a financial lending license by the Securities Exchange Commission in the Philippines – allowing it to offer alternative non-bank micro-enterprise loans to qualified bizmoto agents, registered bizmoto network members and enterprise platform partners.”

70% of Philippines unbanked or underbanked a huge potential market. Look to the success in China of similar platforms. Chinese players unlikely to get a foothold due to South China sea tensions.

Can’t trade it as below 2c Strawman limit ( I bought at 3) so bottom draw for me.