Mitek Systems: The Microsoft of Mobile Deposit and Bill Pay Software?

| About: Mitek Systems (MITK)

Mobile payments and deposits seem like one of the next big trends:

"The Mobile-Payment Gold Rush"

MOBILE PAYMENTS IN THE U.S. are expected to grow at a 68% compounded annualized-growth rate over the next five years, fueled by growing smartphone share of the mobile-phone market.

Mobile Payments to Reach $214 Billion By 2015, Aite Forecasts

Enter MITK (see website here)

Float 12.3m Outstanding Shares 18.3m

"Mitek Systems Inc., the leading software provider in the field"

MITK has two very exciting software products in this fast growing field. One is patented and the other is patent pending:

Mobile Deposit:

Patented in the fourth quarter, Mobile Deposit gives smartphone users an accurate, secure and easy-to-use way to deposit checks simply by snapping photos of their checks with the cameras on their mobile devices. Mitek's Mobile Deposit patent, entitled "Systems for Mobile Image Capture and Processing of Checks," was issued on August 17, 2010. Among other elements, the patent contains claims that cover capturing an image of a financial document such as a check using a camera in a Smartphone or other mobile device, and transmitting the image to a bank server for processing and deposit into a customer's account.

Mobile Deposit has been widely embraced by leading technology solutions integrators and application services providers for the financial services industry, including Fiserv, NCR, FIS, Jack Henry & Associates, WAUSAU Financial Systems, BankServ, J&B Software, Bluepoint, Cachet Financial and RDM, among others. In addition, the Company has partnered with leading mobile-banking-application providers, including mFoundry, Clairmail, Kony Solutions and Monetise Americas.

More and more banks, credit unions and payment-management organizations, including PayPal, with the Mobile Check Capture feature of its PayPal Mobile app for iPhones, are deploying Mitek's mobile check deposit solution to their customers, which the Company expects will continue throughout the remainder of 2010 and into 2011. The Company anticipates announcing significantly increased adoption and use in the near future by large financial institutions and payment management organizations.

Mobile Photo Bill Pay:

Early in the current quarter, Mitek introduced Mobile Photo Bill Pay™, its latest innovative application for the financial services industry, which allows people to pay their bills simply by snapping photos of their paper bills or invoices. With Mitek's new Mobile Photo Bill Pay app, users can submit electronic payments from their smartphones without having to write checks, lick stamps, visit a payment location or even use their personal computers. DeBello said Mitek is now in discussions for the distribution of Mobile Phone Bill Pay with a number of leading banks, integrators of technology solutions and applications services providers for the financial services industry.

Mitek won BAI's first MobileLink award for its new app that allows users to capture and pay bills with a mobile phone the same way they capture and deposit checks.

“We’re seeing an unprecedented level of interest in our products,” company president and chief executive James B. DeBello said at an investor conference call.

About Mitek Systems:

For more than 20 years, Mitek Systems has provided financial institutions with advanced imaging and analytics software to authenticate and extract data from imaged checks and other financial documents. Mitek's patented technology is currently used by all leading financial organizations in the United States to process more than 10 billion items per year.

Today, Mitek is applying its patented technology and extensive expertise in image correction, optical character recognition and intelligent data extraction to mobile devices. Using Mitek Mobile Apps, smartphone users can now deposit checks, pay bills, save receipts and fax documents while on the road or sitting at a desk -- eliminating trips to the bank, Post Office and file cabinet. Simply take a picture of the document and Mitek does the rest -- correcting image distortion, extracting relevant data, routing images to their desired location, and processing transactions through users' financial institutions.

Financials - MITK is finally is reaping some financial rewards after years of investment. MITK just had their first profitable quarter of $0.01 EPS, but sales were up 100% and gross margins were 87%. I see this company as one just about to become very profitable after years of investment. So it is a future earnings play on a strong, growing theme.

Again, I am not in MITK.OB as a fast trade and I think it can at least double from $3.35 in the next 1-12 months or become a buy out candidate sooner. I am long from $3.35.

Disclosure: I am long MITK.OB from $3.35