Fintech of the Future: Banking for the Unbanked

LONDON, June 25, 2018 /PRNewswire/ --

Immigration is on everyone's mind right now, just look at the news. But it's important to remember: down south, it's not just people moving north across the border, there's a lot of money heading in the opposite direction, as well. Mentioned in today's commentary includes: DPW Holdings Inc. (NYSE: DPW), Square Inc. (NYSE:SQ), Advanced Micro Devices Inc (NASDAQ: AMD), Teradata Corporation (NYSE: TDC), Shopify Inc (NYSE: SHOP).

Each year, more than $138 billion exits the United States, in the form of remittance: money earned within the U.S. which is then sent back to family members living abroad. Almost all that money is earned by people living off the grid, without bank accounts or access to financial services, who go to 7-11 or Western Union to send their money through wire transfer.

A full 7 percent of the U.S. population is 'unbanked'. And that pales in comparison to Mexico, where 65 percent of people don't have bank accounts and 95 percent of all transactions are conducted in cash. Confronting this issue represents a huge opportunity for any fintech firm.

One company, QPAGOS (QPAG), has patented self-service kiosks for use in 'unbanked' areas: a secure way for individuals without access to traditional financial systems to conduct personal business, deposit funds, trade crypto-currency or move money.

The company has already expanded inside Mexico. Now, through a joint venture with DPW Holdings Inc., it hopes to expand its network within the United States, seizing part of the billion-dollar remittance market in the process.

QPAGOS: Bringing Light to the 'Unbanked'  

Two billion people worldwide lack a bank account. Despite the explosion in fintech spending in the last several years, little work has been done on how to access this massive, untouched market.

QPAGOS (QPAG) is making the effort. The company has designed self-service kiosks based on a secure digital payment tech. More than 140 vendors give users of the kiosks the chance to engage in transactions digitally, where they used to use cash. A mobile app, 'Monedero', functions as a digital wallet. Money deposited at a kiosk can be accessed via the app.

QPAGOS earns revenue from users' engaging in transactions, collecting fees while also leveraging ad revenue from the kiosks' computer screens and rental fees from local businesses, who benefit from the kiosks' placement.

The company has already seen its revenue triple since it was founded in 2014. Revenue increased by 58 percent in Q1 of 2018 and will likely continue to rise as the QPAGOS kiosks receive more traffic.

The kiosks will also act as repositories for cryptocurrency-at a time when there are only a handful of crypto-accessible ATMs in North America. Forbes has already called crypto-ATMS 'the future of banking', as they offer a way to break down 'banking barriers'.

Mexico averages about $6.52 million in crypto transactions each week, yet there are only 11 crypto ATMs in the whole country. This leaves a wide opening for QPAGOS. But the company doesn't intend to stop there.

California, Here I Come 

Mexico is just the beginning for QPAGOS (QPAG). The company has just signed a new joint venture with DPW Holdings, Inc., a diversified holding company, to fund a network of kiosks in California.

The deal plans for 1,000 kiosks to be erected throughout California in the next twelve months. The kiosks will hopefully link with up to 10,000 potential vendors, allowing users to pay bills, conduct personal business, transfer money and trade in crypto-currency.

According to CEO Gaston Pereira, QPAGOS is "thrilled to have been chosen by DPW Holdings, Inc., as their strategic technology partner."

The company's tech, 'successfully deployed in Mexico and a dozen other countries', seeks to obtain a competitive advantage and allow the partners to "cater to specific consumer needs for both domestic and cross-border payments," Mr. Pereira said.

Deploying this network of U.S. kiosks will be the first step in seizing the valuable remittance market, worth $138 billion. US-Mexico remittances alone are worth $28 billion. Seizing just 1 percent of that market could translate into a revenue stream stemming from $280 million in remittances.

If QPAGOS could expand its reach to other countries, it could tap into the world-wide remittance market, worth $570 billion. The days of people lining up at Western Union could be a thing of the past.

The deal between QPAGOS and DPW Holdings is just the latest step in unlocking the "unbanked" and furthering the fintech revolution. If small, innovative firms like QPAGOS (QPAG) get there before the big banks do, they could make a killing.

Other companies poised to take advantage of the fintech revolution include:

DPW Holdings Inc. (NYSE:DPW) focuses 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 gro`wth 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.

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.

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.

Shopify Inc (NYSE:SHOP) is a Canadian e-commerce company. More than 500,000 companies rely on Shopify's real-time e-commerce, including Tesla, Budweiser and Red Bull, among many others. Shopify makes purchasing goods and services easy for anyone - and at a time where convenience is king, Shopify surely has staying power.

In addition to its revolutionary approach on e-commerce, Shopify is also delving into blockchain technology, making it a promising pick for investors, especially given that the sector is red hot right now.  

By Ian Jenkins

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