NEW YORK, Feb. 16, 2005 (PRIMEZONE) -- Barrow Street Research, a pioneering online research firm, today reported that it has initiated coverage of Acies Corporation (OTCBB:ACIE), an emerging leader of electronic payment and transaction processing solutions, and electronic banking services, to small and medium size businesses. A full copy of the report is available at http://www.barrowstreet.com .
"Our research reveals that ACIE is becoming well positioned to capitalize on the increasing trend to electronic payments," said Barrow Street's Research Director, John D. Attalienti, noting, "...cash transactions are quickly becoming obsolete, being replaced by cashless electronic transactions.
"As a result, investors are looking for next generation electronic payment and transactions processors, and technology companies to outperform the aggregate business and financial services industry sectors. We have determined that ACIE qualifies as a company that can emerge as a leader in the electronic payment industry."
The research analyst reports that "Another important factor in our evaluation of ACIE is the strong relationships that the company has already formed, foremost of which is the one with JPMorgan Chase. Our analysis suggests that the company is positioned to achieve its goals for the next 12-months which include the launching of marketing campaigns to increase its sales growth.
"Importantly," the research report points out, "the company just received a commitment of up to $3.2 million in institutional funding, $1.1 million of which has already been received. This funding substantially solidifies the company's financial position. Indeed, key elements seem to be coming together to suggest that ACIE is on the verge of achieving its ambitious business plan."
According to the 2003-2004 study of the consumer payment preferences conducted by the American Bankers Association, says Barrow Street, consumers have reported that electronic payment methods account for 54% of their in-store purchases, surpassing cash and check usage.
Equally important, the report points out that, according to the Nielson Report, purchase transactions on credit cards totaled $17.54 billion in 2002, up 4.5% over 2001. These transactions are projected to reach more than $22 billion by 2007.
"Studies have shown that electronic payment solutions benefit the consumer by offering a more convenient point-of-sale transaction, and that merchants typically see an increase in the amount of transactions when electronic payment solutions are utilized," the report notes. The report observes that the growth in credit card transactions in the United States may actually accelerate in the years immediately ahead, the main reason being that the use of checks is still higher in the U.S. than in most other industrialized countries.
"As reported in the FDIC Banking Review in 2001," Barrow Street says, "the United States wrote 144.6 checks per capita, more than twice as many as the next highest user of checks - France -- with 71.2 checks per capita. Other countries in Continental Europe, except France, have virtually eliminated checks: Belgium, Germany, Italy, the Netherlands, Sweden, and Switzerland all had 10 or fewer checks per capita in 2001.
"Indeed, it has long been known that the U.S. payments system depends more on checks than is the case in all other industrialized nations. Since a great deal of effort, energy, and expense is incurred in moving large amounts of paper long distances, the demise of the check has been seen as inevitable and desirable. Not surprisingly," notes the analyst, "the trend toward a cashless society has tremendous growth implications for a company like ACIE, and comprises a prime component of our enthusiasm for the stock."
Other reasons for that enthusiasm, says the Barrow Street analyst, is that "The company also offers banking services through Acies Bank, a full-service financial portal with banking services provided by The Bancorp Bank. The Bancorp Bank is a full-service, FDIC insured institution that offers a wide range of personal and business financial services on a nationwide basis. ACIE also offers customers a wide selection of point-of-sale equipment. The company offers payment authorization terminals and peripheral equipment that are state of the art, yet compact and simple to operate. A full listing of the company's products and services can be found on its web site.
Noting that Acies serves a diverse portfolio of small-to-medium size merchants primarily in the retail, restaurant, supermarket, petroleum and hospitality sectors across the United States, the report goes on to note that the company's merchants typically process on average $12,000 a month in credit card transactions and have an average value of approximately $45 per transaction. The company's management believes that larger, traditional payment processors have underserved these merchants. "Consequently," says the analyst, "these merchants have historically paid higher transaction fees than larger merchants, and have not been provided with the services and solutions that ACIE can now provide."
The company's growth strategy, says Barrow Street, "involves the objective of taking advantage of the proliferation, and increasing acceptance, of card-based payment systems. Moreover, the company plans to build on its existing competitive strengths, and further enhance its position as a rapidly growing provider of electronic transaction and payment processing, and banking services to merchants across the United States. ACIE believes it has an opportunity to organically grow its business by further penetrating the small merchant market through existing relationships with company agents.
"...The company's management believes that during 2005 it will be able to significantly increase the number of merchant accounts, perhaps by as much as 75%, with a similar magnitude of growth possible in 2006," the report continues. "Management believes that this level of growth is possible because it accomplished nearly all of its current volume within the past 12-months, and it anticipates adding additional qualified sales agents at the same rate as current sales growth. Additionally, the company expects that the average per transaction processing fee is expected to increase by 7% in 2005, and by about the same amount in 2006. Given these parameters, the company believes that revenues for fiscal 2004 could be in the vicinity of $3 million, and that in fiscal 2005 revenues could approach $7.5 million, with a positive bottom line.
"...In our opinion," the report concludes, "ACIE is well positioned to embark on a period of rapid growth. We believe that the company operates in an industry that will continue to expand in the years immediately ahead, and that management is well equipped to adapt to the competitive nature of its industry by offering merchants a higher level of service compared with other companies. For high-risk oriented investors, we are initiating coverage of ACIE with a BUY rating and are setting a price target of $2 over the next 12-18 months."
Barrow Street Research received compensation in the form of $6,000 from Acies Corporation for its time and due diligence in preparing this research report.
About Acies Corporation
Acies, Inc. ("Acies"), a wholly owned subsidiary of Acies Corporation, is a financial services company that specializes in payment processing services and online banking services to small, medium, and large-size merchants across the United States. Acies' payment processing services enable merchants to process Credit, Debit, Electronic Benefit Transfer (EBT), Check Conversion, and Gift & Loyalty transactions. Acies also offers traditional and next-generation point-of-sale (POS) terminals, which enable merchants to utilize Acies' payment processing services. Acies' banking services offer customers traditional banking services, ability for customers to apply for an on-line bank account and pay bills electronically.
For more information, visit http://www.aciesinc.com .
Forward-looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains or may contain forward-looking statements such as statements regarding the Company's growth and profitability, growth strategy, liquidity and access to public markets, operating expense reduction, and trends in the industry in which the Company operates. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in risks, uncertainties or assumptions underlying or affecting such statements, or for prospective events that may have a retroactive effect.