Banking in its current for may soon be dead. Long live super-banking. Banking has a disease. It’s stuck in a time warp and inspires little trust or customer confidence, but that was yesterday. Today, the genius of technology is surrounding this space, and the future may already be here. Banks are scared, and they should be. They’ve forgotten that the customer is king, and that this is a digital era where innovative new fintech companies have them surrounded. Mentioned in today’s commentary: Alphabet (NASDAQ:GOOG), Bank of America Corp (NYSE:BAC), Accenture (NYSE: ACN), Quintiles IMS Holdings, Inc (NYSE:Q), Quintiles IMS Holdings, Inc (NYSE:Q).
Digital and mobile payment platforms are replacing traditional banks and credit card systems. American frustration with the banking industry has led to record years of mounting complaints.
This is the banking model reboot, and one company is ready to roll out the super-bank model of the century: One that will serve millions of ordinary customers by listening, by making it super-easy to pay utility bills, send and receive money and even buy and sell cryptocurrencies.
The massive digital evolution that could completely up-end the banking industry is already here. And the company behind the super-bank evolution is QPAGOS (QPAG).
QPAGOS is already working with giants in the telecommunications and tech industries: That includes AT&T, Xbox, Apple, Virgin Mobile, Nextel–and 150 others. And it’s ready to latch on to the opportunity to try to capture another 400 million customers over the next few years.
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The company plans to roll out tens of thousands of self-service kiosks in the U.S. and if that sounds wild, it is-but it’s not wildly expensive. QPAGOS’ plan to capture the evolution of banking comes at a ridiculously low-price tag compared to traditional banking.
Not only do Super-Banks operate at a fraction of the cost, they have more profit potential because of the fee structure that collects on a wider spectrum of services. So far, QPAGOS has been seeing double-digit quarter-on-quarter revenue and earnings growth for four straight years.
Now comes the big push … and while traditional banks are busy shuttering thousands of branches in the suburbs and out-backs, this Super-Bank is preparing its major breakout. Consider this: they’ve already got 700 self-service banking kiosks up and running. The next phase is 1,000 new kiosks, and they’re planning 10,000 over the next few years.
The future of banking is here.
Here are 5 Reasons to keep a very close eye on the QPAGOS (QPAG) breakout:
#1 Fees, Fees, Fees: A Revenue Generating Genius
QPAGOS has already stormed Mexico. It has positioned itself as one of Mexico’s pre-eminent providers of cutting-edge digital payment services for both consumers, merchants and services providers, and now it’s coming to the U.S.
The company’s payment ecosystem is huge. It boasts a massive network of self-service banking kiosks, point-of-sale terminals and mobile apps that connect merchants and consumers with more than 150 service providers across multiple devices.
It’s even got a proprietary electronic wallet–Monedero-which lets users deposit cash for future top-ups or mobile app purchases. It’s established in Mexico, where it is one of the pre-eminent providers of cutting edge digital payment services. And it’s a household name on all fronts: consumers, merchants and service providers.
Mexico has been a gold mine, with 60 percent of its population not using banks and 95 percent of consumer purchases being made in cash. Enter QPAGOS with a digital solution that met everyone’s needs.
Mexico was the springboard. And it was a wild success. What has come since then is global. And its payment solutions have already been successfully deployed across continents, including South America, North America and Europe. And it’s all about revenue. In this case, it’s about combining the massive revenue of banks, online payment processors and mobile payment solutions.
The potential markets for payment processing, utility payments and overseas remittance services are mouth-watering, and that’s just in Mexico.
#2 Scaling Up: 10,000 New Banks Coming
Let’s break it down, because this is only part of the game:
Not only does QPAGOS earns fees when people upload funds to Monedero when they have to pay bills for the hundreds of providers on the platform. It’s also launched a charm offensive targeting the lucrative international remittances market.
The company has begun rolling out a huge network of self-service banks along the U.S.(California)- Latin America corridor to facilitate cross-border money transfer and payments. And it’s planning to deploy 1,000 self-service kiosks in California in Phase 1 and rapidly ramp up to 10,000 self-service banks over the next few years.
As the company continues to rapidly scale up, its addressable markets and revenues are expected to grow in tandem. This should provide it with excellent growth runways that are likely to help the company exceed its robust revenue growth clip of 58 percent Year-over-Year and 37 percent Quarter-over-Quarter (posted during the first quarter of 2018).
#3 A Very Lucrative Model of Inclusion
Capturing the global banking market right now is about two things: inclusion and self-service. That’s why traditional banks are way behind. Until now, QPAGOS has mainly targeted Mexico, where low credit card and ecommerce penetration and a high cash usage have created a huge market for this product. In Mexico, only 2 percent of the country’s $200-bilion annual retails sales are transacted through credit cards.
The unbanked world is much like the USA was in 1950. Inefficiency has ruled the day. Long queues, high fees and low cash-machine coverage are all the hallmarks of the banking industry in these countries.
QPAGOS noticed these glaring inefficiencies and responded, seeking to bring a super-bank kiosk to every street corner. Then they added pre-paid payments, loans and remittance services.
Now, in Mexico, they’re targeting a market with 6 billion cashless transactions a year and have started reaping the rewards.
The value proposition is impressive:
• Intuitive, easy-to-use touchscreens that not only allow direct interaction with customers but also generate new leads which allows QPAGOS to cross-sell its multiple services to users.
• Tailored payment solutions easily adapted to different customer needs housed in highly secure data centers and designed for rapid deployment.
• A vendor agnostic system, which means they can be delivered through a wide range of hardware devices including its self-service banks, mobile devices, POS devices and PCs.
• Proprietary payment solutions that aren’t just cheaper, but they offer wider geographical coverage depending on mobile connectivity.
This is how the will capture the market: with flexibility. In fact, it’s all so flexible that it’s ideal for everyone from retailers who want to decongest teller lines and agent networks of independent businesses with high customer traffic to banks and financial intermediaries who want to extend their geographical collection points. Or government municipalities that are looking to bring services closer to citizens…or even a wide range of electronic payment distributors who would like to use QPAGOS’ self-service banking kiosks to reach customers.
#4 Huge Network for Major U.S. Rollout
The beauty of it all is that QPAGOS is likely to hit the ground running once it embarks on rolling out self-service banking kiosks across the United States. Behind these super-bank kiosks is an entire ecosystem of service providers including heavy-hitters like AT&T, Facebook, Dish, Sky, Movistar, Maxcom, Nextel, Telcel, Infonavit, Telmex, Izzi, CFE, Gas Natural, Pronosticos and other mainstream service providers.
Again, the U.S. rollout is going to see 1,000 new kiosks along the California-Latin America corridor, and a whopping 10,000 in the next few years. And QPAGOS has a huge moat … Boasting considerable technology and contractual moats, QPAGOS is set to expand and defend its position in the cash2digital payments industry.
It’s contractual agreement moat is equally impressive. QPAGOS has already signed up more than 140 mainstream service providers to its platform including ATT, Xbox and cell phone providers Telcel, Telmex, Virgin Mobile, Nextel as well as other large providers that serve millions of Mexicans.
Now they can focus on the business of rolling out super bank kiosks in the U.S.
#5 Super-Tag Team for Super-Banking Evolution
Led by CEO and Chairman Gastón Pereira, QPAGOS is trouncing the future of banking. Pereira, formerly of Citibank, has over three decades of experience in financial services, cross border payments and telecommunications in all the right geographies: U.S. Europe and Latin America.
In this sector, he’s a groundbreaker, and when it comes to digital consumer financial products and services, he’s a pioneer. Nobody knows Latin America remittances like Pereira, and this will be one of QPAGOS biggest expansion areas.
It helps, too, that Director James W. Fuller, a former senior VP of the New York Stock Exchange (NYSE) is on board, along with Andrey Novikov, a figure synonymous with global innovative payment services.
Together, they are building a momentum that is bulldozing its way across continents. More super-bank kiosks are rolling out in Mexico right now, but the biggest opportunity presents a critical moment for investors: They’re preparing a major U.S. rollout right now, and with earnings growing over 30 percent quarter-on-quarter, the next quarter close is drawing near.
Other tech companies to watch as finance gets turned on its head:
Alphabet (NASDAQ:GOOG): With a market cap of over $809 billion, this is the second-largest by market capitalization in the S&P 500. Despite Google’s stance against cryptocurrencies, the company is actively pursuing blockchain technology and is a key player in the fintech realm with its Google Pay application. As the battle against banking heats up, Google is leading the charge.
Bank of America Corp (NYSE:BAC) With the fintech revolution threatening its core business Bank of America is embracing the revolution in artificial intelligence. Embracing this new tech should set BOA above and beyond its competition, though Citigroup and other major bankers have shown little hesitation in getting into new tech themselves.
Accenture (NYSE: ACN), the global consulting and technology firm, is arguably at the forefront of blockchain technology. Accenture can claim leadership on multiple fronts in the blockchain space, working with industries, governments, the academic community and crypto-tech experts.
Quintiles IMS Holdings, Inc (NYSE:Q) is one of the world’s “most admired companies” according to Fortune Magazine. Spanning over 100 countries, Quintiles IMS is definitely ahead of the pack. Quintiles IMS provides research and development that push healthcare forward using data and technology.
Pure Storage Inc (NYSE:PSTG) knows that data platforms are also a key asset in protecting companies against cyber-attacks. As the cybersecurity world becomes increasingly competitive, Pure Storage stands out because of its innovative and forward-thinking business model.
By. Ian Jenkins