VENDTEK SYSTEMS INC V.VSI

Another sunbstantial reveue stream in Brazil

[TheRock07]

VendTek unit to distribute GetNet products in Brazil

 

 

2014-02-20 09:16 ET - News Release

 

 

Mr. Doug Buchanan reports

 

VENDTEK SYSTEMS ANNOUNCES GETNET CONTRACT AWARD IN BRAZIL

 

VendTek Systems Inc.'s wholly owned Brazilian subsidiary, Now Prepay Servicos de Informatica Ltda., has signed an agreement with GetNet, which specializes in the development and management of electronic payment solutions and services for businesses using electronic transaction. GetNet is present in over 400,000 retailers throughout Brazil and Chile.

 

Under this agreement, NPS will have exclusive regional rights to distribute its full product portfolio to merchants who are using the GetNet debit/credit processing solution. NPS will use GetNet's hardware infrastructure to deliver its products.

 

GetNet, established in 2003 and based in Brazil, is a pioneer of the virtual telephony recharge in Brazil and was the first company to introduce Wi-Fi and broadband sales terminals in the country. In 2006 GetNet created a corresponding banking solution allowing it to reach 100,000 terminals by 2007.

 

After creating its own processing platform for Visa and Mastercard credit cards, GetNet established a joint venture with Santander Bank, making it the first company to enter the credit card acquirers market that used to belong exclusively to VisaNet (Cielo) and Redecard. Getnet is now majority owned by Santander and is one of three main companies offering merchant services.

 

We expect this agreement to have a significant impact on the growth of the Now Prepay network in Brazil. It is launching in February 2014 and we expect to be able to sell our products and services to approximately 4,000 new GetNet locations by year-end.

 

"This agreement represents an enormous opportunity for low-cost growth for our Brazilian operations. GetNet is the fastest growing player in the electronic payment solutions market in Brazil and this agreement enables us to rapidly grow our penetration into the Brazilian market using their hardware and merchant acquisition efforts," Said Doug Buchanan, President and CEO of VendTek Systems Inc. "Historical information from the merchants will also allow us to target premium locations that have higher transaction volumes".

[weybac]

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[TheRock07]

Don't how you arrived at that number but here is mine. Each terminal generates about $1250 in annual revenues......This is computed from quarterly info. VSI gets about 7 % of this or about $85 per terminal. There are 400,000 retail locations. Each must have at least one terminal but there could be multiple terminals. Lets assume just one. When fully installed, these will generate $35

[weybac]

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[dqma]

I have followed the stock for a while since recommendation from HC more than 6 years ago. Looks like they have been keeping announcing deals in Brazil for a while. But their growth rate is not up to expectation s far.  what makes you think that brazil will show a strong growth rate this year?

[weybac]

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[TheRock07]

When you consider the blue chip names they have signed contracts with.....Petrobas, Mastercard, Santander etc...... and the fact that Brazil is several times larger than Canada and  very much less penetrated by IT banking than Canada, the growth rate is going to be scorching. $20 million, $40 million, $60 million....its hard to projectb but VSI had sales in excesss of $80 million in Canada

[dqma]

In the Brazil market, Vendek is selling to distributors and to retailers directly. This removes the middleman and more than triples gross margins. I guess the downside is that this business model is pretty capital intensive and they had to sell their canadian business to finance it? I understand for their other international market they are trying to move away from this business model to more

[2j3kl]

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[Gladys7]

dqma says: I guess the downside is that this business model is pretty capital intensive and they had to sell their canadian business to finance it? Well, the share price has taken a beating over an accounting error a few years ago, and then the lack of growth in the canadian pre-paid market.  They have topped out the Canadian business; the only way they can get more business is to take from