BPAY moves paper mountains
Perth share registry business switches to BPAY and solves its paper problem
Perth’s Security Transfer Registrars has found a niche managing the share registries of some of Australia’s most innovative mining businesses. It maintains share registries for around 250 listed and 50 unlisted entities.
These businesses regularly raise capital from their shareholders and it is Security Transfer Registrars’ role to manage this process, collecting subscription payments and then allocating shares.
"We deal with small to mid-cap companies, as well as a number of larger companies and many of our clients are Western Australian miners," says Glenn King, General Manager, Security Transfer Registrars.
According to King, until the business implemented BPAY as a payment option, it had what he describes as "a paper problem."
"Applications for a transaction such as a rights issue would be sent to shareholders and they would send back the application, along with a cheque attached," explains King.
"If we had a large number of capital raisings going at the same time, we would drown under a mountain of paper – it was hard to see the staff for the paper. There was also a cost involved in detaching the cheques, doing a reconciliation and then going to the bank. It’s fair to say we had an enormous paper problem. To now be able to manage this process electronically is a huge benefit for the business," he says.
Since the business implemented BPAY as a payment option in 2010, instead of posting a cheque when they want to participate in a capital raising, its clients’ shareholders have been able to pay for their allocation with BPAY.
King is working with BPAY on a joint marketing campaign to increase investor uptake of BPAY. Security Transfer Registrars also includes messages on its web site, on share applications and on other marketing material encouraging investors to use BPAY.
"Our goal is to encourage more people to use BPAY. Around 60 per cent of our shareholders use it. Some people still prefer cheques and our clients don’t want to exclude anyone, but we’re really pushing shareholders to use BPAY," says King.
"We include fliers in our mailings BPAY has provided that let shareholders know BPAY is our preferred payment method," he says.
According to King, BPAY has many advantages for Security Transfer Registrars and also for investors. "People can make a payment for shares in the same way as they would make their other regular payments. Funds are also immediately cleared for clients and we don’t have the problem of dishonoured cheques."
BPAY payments can also eliminate the problem when cheques don’t arrive before the closing date for a capital raising. King says the fact shareholders can pay for their shares on their mobile or laptop, wherever they are, at any time and also don’t have the cost and hassle of writing and then posting a cheque, also makes it a very attractive payment option.
King says implementing BPAY in the business has been a smooth process.
"I’ve been involved in many system implementations. With BPAY, as soon as you come to grips with what’s required, it’s quite a simple process."
King believes implementing BPAY has been a very successful initiative for Security Transfer Registrars.
"In our industry businesses can be overrun by paper because of the many legal requirements. But even though we still send out share applications, people don’t have to return them, as payment with BPAY is deemed to be acceptance of the offer," he adds.
"I would recommend it to any business. I see both the customer’s and the business’s side. From my perspective everyone should use it."