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New Tech to Help 2 Billion People Without Bank Accounts

New Tech to Help 2 Billion People Without Bank Accounts

FN Media Group Presents Market Commentary

LONDON,-For all the talk of an emerging “cashless” society, in much of the world cash is still king. In Mexico, it’s estimated that 65 percent of the adult population is still without a traditional bank account – and 80 percent of all financial transactions are conducted in cash. Yet an upstart company is working to change that. Mentioned in today’s commentary includes: DPW Holdings Inc. (NYSE: DPW), Square Inc. (NYSE: SQ), Teradata Corporation (NYSE: TDC), Advanced Micro Devices Inc (NASDAQ: AMD), Rapid7 Inc (NASDAQ: RPD).


QPAGOS (QPAG) has developed a way to offer digital payment services to as many as 2 billion “unbanked” consumers worldwide. By installing self-serve payment kiosks in easily accessible locations, QPAGOS helps people without bank accounts pay bills electronically, transfer money to relatives and friends, and access digital services once cut off to them.

It’s a brand-new industry in many places – and business is exploding. QPAGOS reported a 58 percent increase in revenue in the first quarter of 2018 – and is now expanding to an initial target market estimated at 400 million people.

Not surprisingly, QPAGOS’s stock has also soared in recent months, up more than 100 percent in value since late January 2018. Plus, there are reasons to believe that QPAGOS’s recent revenue growth will persist – and that QPAGOS’s stock could continue to rise in value in the months ahead.

Advanced technology: The key to QPAGOS’s (QPAG) growth lies in its simple yet sophisticated self-service kiosks and secure digital payment technologies. The digital banking kiosks are like ATM machines on steroids, allowing “unbanked” consumers who normally use cash to pay bills electronically and transmit payments to remote locations.

In addition to the kiosks, the company also provides payment solutions via mobile phones.

That’s important because, according to estimates from the World Bank, half of the world’s 2 billion unbanked consumers have cell phones – and thus could potentially access QPAGOS’s “Monedero” electronic wallet app.

The app lets users without bank accounts pay for products and services with their phones, and the same technology gives small businesses the ability to accept payments in remote locations without expensive merchant card terminals.

Strategic partnerships: To achieve its ambitious goals, QPAGOS (QPAG) is working with some of the world’s largest companies, including AT&T, XBox, Dish, Apple, Virgin Mobile, Nextel and 150 others.

These companies are able to use QPAGOS’s digital banking platforms to gain access to millions of cash-paying customers who might not normally avail themselves of digital services. Consumers, for their part, can use QPAGOS kiosks to pay in cash for services such as cell phones, utility bills and even digital movies.

Huge revenue potential: The fees that digital banking generates are legendary. Although the individual charges can be relatively small, the large number of transactions creates a revenue stream that is a virtual tsunami of cash. Since it started in 2014, QPAGOS has seen its revenue soar from $1.1 million in 2015 to $3.9 million at the end of last year.

Plus, in addition to the traditional fees that QPAGOS collects – payment processing fees, service provider commissions, advertising fees and kiosks sales and rentals – QPAGOS is also now targeting the enormous “remittances” market in North America.

Each year, foreign workers in North America transmit an estimated $60 billion to relatives back in their home countries, often using expensive and inconvenient storefront locations, such as 7-11 or Western Union, to do so. With its easy-to-use self-serve kiosks, QPAGOS hopes to siphon off a large portion of this $60 billion cash payment stream.

Virtually unlimited market: At the moment, QPAGOS (QPAG) has consolidated its position in emerging market countries in Latin America where an estimated 80 percent of the adult population still uses cash alone to pay its bills. For QPAGOS, this represents a market of 320 million unbanked consumers in countries such as Brazil, Chile, Columbia, Peru and Mexico.

In Mexico alone, QPAGOS has already placed 700 kiosks and is targeting there an untapped market of 36 million unbanked consumers with the potential of 320 million payments per month at 214,000 possible locations, such as supermarkets, pharmacies and mom and pop stores. And beyond the emerging markets in Latin America, QPAGOS also aims to expand into the U.S. and beyond.

Its initial goal is to establish 1,000 kiosks in the U.S., primarily in California, and then to expand quickly to 10,000 kiosks. If the company can assist foreign workers with just 1 percent of their $60 billion electronic transactions, that represents payments of some $600 million.

Plus, the U.S. is just the beginning. As noted earlier, the World Bank estimates there are currently 2 billion adults around the world without access to formal financial services. QPAGOS could potentially service -billions of electronic payments per month. It could easily end up being the PayPal of the unbanked world.

Limited competition: What makes QPAGOS (QPAG) a potentially exciting opportunity is the relative lack of competition in the unbanked market. While those with access to regular bank accounts can avail themselves of a wide variety of electronic payment systems, such as Venmo, Apple Pay and PayPal, the unbanked have limited choices.

QPAGOS stands virtually alone in aiming to introduce the 2 billion unbanked consumers around the world to the entire digital electronic “ecosystem” – one that includes cell phone “wallets,” cellular advertising, point of sale payments, bill paying and more. In Mexico, there is currently no comparable technology and QPAGOS has a virtual monopoly on the electronic payment market among the unbanked.

Experienced management team: In addition, QPAGOS’s (QPAG) management team has unique experience in both the Latin American market as well as in the financial services, IT, telecom, and digital payment industries. The broad international resources available to the management team give QPAGOS a foundation for rapid expansion across multiple markets.

The CEO, Gaston Pereira, is a seasoned financial executive whose experience includes serving as CEO of IUSATEL Chile, MARCATEL Mexico and as vice president and country manager for Citibank. Chief of Operations Andrey Novikov served as vice president for business development at a large Russian electronic payments company, Qiwi. And the Independent director James Fuller served as Chairman of the Board of the Pacific Research Institute, Senior Vice President of the New York Stock Exchange (NYSE) and past president of both the Bull and Bear Group and Morgan Fuller Capital Group.

Undiscovered windfall: Right now, QPAGOS is a relatively small, brand-new company. Yet already its stock has shot up 114 percent just in the past few months as word of its unique position in the self-serve payment market spreads.
At the moment QPAGOS is generating annual revenue of approximately $4 million with just 700 of its self-serve, touch-screen kiosks operational. If it adds an additional 3,000 kiosks per year, it’s possible that QPAGOS could hit $35 million in sales in just 24 months.

Best of all for investors, QPAGOS is currently flying below Wall Street’s radar. Yet that could change overnight – especially as QPAGOS strikes new deals with such giant e-commerce companies as Virgin Mobile, Movistar, Telcel and others.

It’s possible that QPAGOS (QPAG) might eventually be seen as the “PayPal of the emerging market.”

Other companies to watch as financial technology takes off:

DPW Holdings Inc. (NYSE:DPW) is a holding company focusing on the acquisition of disruptive tech within a number of industries. From aerospace to cryptocurrency mining, DPW identifies and incubates undervalued assets with the possibility of significant growth in the future. The company’s devotion to innovation cannot be ignored, and as the fintech revolution takes off, DPW is sure to jump in head first.

DPW’s sharp eye for emerging technology and dedication to shareholders make it a likely choice for investors, and as the tech boom accelerates, the company is unlikely to disappoint.

Square Inc. (NYSE:SQ): Its genesis was all about smartphone plug-ins (hardware) targeting food truck vendors and other small businesses that needed an easier way to accept credit cards, or face losing major business. They filled a niche that did not exist but needed to…and quickly. Since then, the company has started targeting much larger businesses with an array of services and software-all geared toward merchant convenience, which translates into bigger revenues for all parties.

Teradata Corporation (NYSE:TDC): Providing other data platform solutions, Teradata Corporation specializes in analytic data platforms, analytic applications, and related services. The services are used around the world and its offerings include analytic solutions, ecosystem architecture consulting and hybrid cloud solutions.

Teradata Corporation may be flying under some investors’ radar, for the moment, but with the rapid growth of the fintech industry, the opportunity to get in cheap won’t last for much longer.

Advanced Micro Devices Inc (NASDAQ:AMD) is Nvidia’s biggest competitor. The company has developed a cult following among gamers, leading to many a Reddit debate. AMD’s groundbreaking technology not only rivals that of Nvidia, some even argue that it outperforms it. As the two square off, one of the key areas to keep an eye on is in the GPU race. Widely purchased across the world as Bitcoin frenzy heats up, AMD is making a particularly hard push toward conquering that emerging demand.

While Nvidia has a significantly higher market cap (and stock price), AMD provides investors a much cheaper entrance into the gaming market. Those looking to get into tech industry stocks, mine Bitcoin, or play their favorite game on the highest quality are definitely not ignoring AMD.

Rapid7 Inc (NASDAQ:RPD) is a huge player in security and information technologies. The company’s special, analytics-driven approach to cybersecurity and IT operations give it an incredible advantage over its competitors. The company’s in-depth knowledge of the threats facing businesses’ physical, virtual, and cloud-based assets allow for high quality service which puts Rapid7, Inc ahead in the field.

As the threat of cyber-attack becomes more and more apparent, investors are realizing the value of cybersecurity firms, making them some of the hottest stocks on the market.

By. Ian Jenkins

Global Banking & Finance Review


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