nowEurope

Recently, during my visit to Ukraine I came across of very interesting investment proposal, which might be of interest to professional Venture Capital or Equity Investors. Persons behind the project have 10+ years of experience in the field and are looking for strategic partners.

Briefly about the project: during 1993-05 an Interbank Electronic Payment System was introduced in Ukraine (so called Ukrainian SWIFT), where the predecessor of the Company was actively involved in. Today Ukrainian SWIFT system has been implemented and now National Bank of Ukraine is considering the introduction of National System of Mass Electronic Payments (NSMEP) to release the potential of integrated payment system and increase the turnover of non-cash transactions.

The present company has developed a concept of the NSMEP as well as all the necessary equipment for the realization of such system. The investment is needed into the roll-out phase, having thus reasonable investment risk at pretty attractive return rates. The advantages proposed by the Company are based on secure offline payments, which enable to decrease transaction costs compared to online payment systems by several times (transaction cost of 0,6%-0,8%). This in turn facilitates uptake of payment terminals by retailers, who are inclined to pay smaller commissions to banks (currently the commission rates are 2-3% due to online processing). To secure offline payments, the risk management is taking place on the level of smart-card and terminal, terminal and bank processing center, and on the level of single bank and National Bank. The principles of technology are briefly outlined in the business plan, which I have in my possession.

The Company has a contract with National Bank to implement the system in Ukraine, however the Company is expected to bear investment costs itself. Now they need investor. Investment amount is 2,5 mln USD into existing company with break-even at the end of the first year and expected returns of ca 15 mln USD at the second-third year of activity. Naturally, due diligence has to be done, but on other merits, including political and economical situation, the project looks interesting.

In case this is of interest, please contact me.