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Small caps blog: Hang on a Parseq

By Cher Kast

Date: Monday 19 Sep 2011

Small caps blog: Hang on a Parseq

As per Friday's blog entry on mobile and online banking software specialist Parseq, the company's chief executive Remi Cassis and his backers have revealed the price at which they are contemplating making an offer for the company.

It is 7.5p per share.

Broker Merchant Securities is less than gruntled.

"Ironically it is the underperformance of Documetric, which was reversed into Intelligent Environments by Rammi Cassis, which has damaged the price and short term outlook," fumes Merchant Securities analyst Julian Tolley.

Intelligent Environments was the name Parseq traded under before the reverse takeover by Documetric, the business process outsourcing firm founded by Cassis.

"The offer fails to take into account the significant progress being made by Intelligent Environments Mobinetic e-banking software," Tolley continues.

Merchant Securities has a target price of 10.5p for Parseq, based in part on the release in the next quarter of the O2 e-bank, the banking service from the eponymous mobile phone network provider, that will use Mobinetic e-banking software.

There is plenty of scope for further contracts with O2 and others, Tolley argues.

Coincidentally, an e-mail dropped in to my distinctly old-school desktop PC-based e-mail in-box over the week-end from boutique consultancy, Mobile Money Consulting (MMC).

Killian Clifford, of the MMC, has been flagging up the efforts of the big card payment companies (Visa, Mastercard and the like) to sew up the mobile money market in emerging markets.

"Mobile money represents a new frontier for them. Not only is it a chance to expand into untapped markets and to establish their brand but it also gives them the opportunity to shape the payments landscape in places where there was none before," Clifford suggests.

Both companies have been hooking up with the platform providers, the companies that provide the technological infrastructure that enable such payments to be made.

Clifford asks: "So where does that leave the other potential entrants in this market, such as the banks and technical vendors?"

As Clifford observes, in a point that applies to Parseq, it is still early days in the mobile payments industry. "It is still fragmented and there is no one standard operating model. The door is still open for these other players to roll out infrastructure and build up their brand in countries and regions where mobile money has yet to launch," Clifford believes, but the clock is ticking and they need to "focus on getting their business model right, act quickly and decisively, and be prepared to compete with some of the biggest players on the block."

The industry may still be in a nascent form, but I can imagine it changing very quickly. Chip & PIN took a while to kill off the cheque, and cash will probably always be with us in one form or another, but as I walk into my station each morning and regard the sign from the bandit car park operators exhorting me to pay my grand larceny parking fee by mobile phone, I speculate that it will not be long before the majority of the human race is making payments via hand-held mobile devices.

No, I don't mean wallets ...


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