Fintech Start Ups Can Become Tomorrow's FANG Players
25 Oct, 2017, 14:00 BST
LOS ANGELES, October 25, 2017 /PRNewswire/ --
USA News Group News Commentary
USA News Group - There can be no denying that the Fintech revolution is in full throttle, going by emerging sector numbers.
Companies that are adapting technology to make Financial Technology better and more efficient are being rewarded including PayPal Holdings Inc. (NASDAQ: PYPL), Vantiv, Inc. (NYSE: VNTV), Square (NYSE: SQ) and GlancePay (CSE: GET) (OTC: GLNNF).
What this indicates is undeniable: fintech's young go getters of today could become tomorrow's FANG (Facebook, Amazon, Netflix, Google) type stocks as they mature in a market with significant demands.
There are already some standouts in the field emerging; some may be more familiar to you as brands, but all of these have something unique that could change the business landscape and make investors wealthy along the way.
The newest of these is a Canadian company that's been dubbed the "next PayPal" for its ability to bring simple, patented technology to a much needed segment of mobile payment. GlancePay, (CSE: GET) (OTC: GLNNF) was just launched in 2016, but it's already the No. 1 mobile payment app in Canada where it originates.
The other Fintech forces that continue to move into more and more fertile areas of financial technology are the innovator PayPal (NASDAQ: PYPL) that handles online payment processing, Vantiv, Inc. (NYSE: VNTV), a credit card processor better known to retailers in the U.S. and Square (NYSE: SQ), which also offers credit card processing and now loans for small to medium businesses.
GROWTH ALL AROUND
Quarter 2 data for 2017 paints the picture of an industry that continues on an explosive trend: a record 5.2 billion in VC dollars raised to finance 252 deals, and the birth of five unicorns: Clover, Robinhood, AvidXchange, Symphony and Tuandaiwang.
This reflects a 38% growth in VC funding in fintech over the same period last year. In all, 18 funding rounds exceeded $50 million.
The writing is on the wall for tech-averse companies and they have taken note, with a big proportion of them taking interest in Fintech: Between Q2 2016 and Q1 2017, 29-33% of corporate VCs took part in fintech start-up deals.
The disruptive effect of FINCH has compelled established financial players to integrate fintech into their business models, executed through aggressive M&A strategies.
At the frontline of this trend is Raymond James Financial, which has spent more than $20 billion on 124 deals between 2010 and 2016.
These statistics illustrate the seriousness with which the financial industry is taking Fintech innovations.
MOBILE PAYMENTS ARE MASSIVE
Fintech is producing some massive numbers and the potential for financial rewards are equally large.
Forecasters expect there will be $503 billion in-store mobile payments by 2020. That's according to according to BI Intelligence, who are calling for a growth rate of 80% between 2015 and 2020.
Industry source Future Market Insights predicts a CAGR growth of 39.4% from 2014 to 2020. That is already old data since it is based on 2015 statistics. There has been a significant increase in growth since then.
Over all, the numbers indicate that mobile payment growth is going to spike.
According to Mobile Payments World U.S. in-store mobile payment users are expected to reach 150 million by the end of 2020.
Newcomer GlancePay has found its foot in the door through the restaurant mobile pay segment.
In 2015, the full-service restaurant industry in North America was worth $286 billion, while the quick service restaurant industry was worth over $230 billion.
That's a lot of payments to process.
PAYMENTS MADE SIMPLE
Companies that intend to make it in the fintech space must simplifying traditional financial systems and approaches.
GlancePay is just that. It offers a streamlined payment platform giving customers the ability to pay their restaurant bill instantly with their mobile device. As GlancePay puts it, "It means no more waiting on waitresses; no more credit card machines; and a single app rather than one for each restaurant."
The app knows where you are using patented GPS technology. If GPS isn't available, it can determine your location using a photo of your location. Similar to the way Google has mapped the world, GlancePay has built a proprietary global database of locations.
GlancePay is the second major app by Desmond Griffin, who built 'PayByPhone' from the concept stage into to a very successful mobile app for parking payments. It now servicing millions of customers in over 100 cities around the world.
Griffin sold the app for nearly $45 million, and it is currently owned by Volkswagen.
NO ONE TRICK PONY
GlancePay allows customers to pay their bill instantly with their mobile device. But it also takes the mobile pay app experience much further than say Apple Pay, which is available only to iPhone owners, and has failed so far to gain widespread usage.
It also helps you choose nearby restaurants, and soon, it will also enable ordering from your table, for pickup or for delivery.
Those who have used the system really love it. That's evident in the fact that GlancePay has vaulted up to become the number 1 mobile payment app in Canada.
Along with this breakthrough technology in the restaurant sector, GlancePay is already diversifying into two other potentially massive markets: Cannabis commerce and Crypto currencies.
Through its newly established CannaPay service, GET plans to offer turnkey solutions for the emerging marijuana market in Canada. The country expects pot to be legalized in as early as mid 2018. Deloitte estimates this sector could be worth a whopping $22.6 billion annually.
GlancePay could be a leading provider to the industry simply by delivering some of the first mobile and direct payment options. At present there are none.
GlancePay says it is also working to provide multiple payment channels from Bitcoin to Litecoin to Ethereum, and others. Innovators like innovation.
NEW OPPORTUNITIES AND MARKETS
Despite massive activity in the last few years covering the most glaring voids in the finance industry, the fintech space is yet to be saturated, but creativity will be key to introducing differentiated products to compete with established ones.
New market places are also expected to emerge as fintech, with experts envisaging demand in risk and resource distribution.
Mobile payment technology is one of the fastest-growing markets in the world, and GlancePay is filling a gap not addressed by the other processing players. They could become be a major market disrupter.
Since large cap companies trade at a premium valuation to the market, their share prices could be volatile over the short term. But investors looking at fintech now are likely thinking long term for significant capital gain returns.
The leading Fintech companies have shown the continued ability to leverage technology in order to transform the way financial services operate. They demonstrate how innovation has directly led to long runways of top- and bottom-line growth.
As Fintech goes, GET is a relatively new company. That can be considered a real positive, since it is largely undiscovered. Since 2016, the company has signed on 160+ merchants and its growth is on path to soar in the best retail months of the year. In fact, its Q2 revenue is up a whopping 664% over the previous quarter.
The growth of fintech investment has necessitated a dedicated media space for the subsector. Conferences such as the Benzinga Fintech Summit will continue to bring together industry players for crucial partnerships, and to grow the knowledge pool for future tech development.
We suggest putting a close watch on the forum and its innovators. Look for GlancePay among elite innovators making the mobile sector one of fintech's most attractive.
POTENTIAL COMPARABLES
PayPal Holdings (NASDAQ: PYPL)
In 2014, mobile commerce accounted for a little more than 11% of the $303 billion domestic e-commerce total. It's expected that could balloon to 45% of e-commerce, or about $284 billion, by 2020. PayPal appears to be better-positioned than any other company (at the moment) to capitalize on this trend. Last year, PayPal facilitated more than $100 billion of total payment volume originating from mobile devices. That figure is expected to go up significantly in 2017 thanks to growth from features like PayPal's One Touch feature. When the company reported its first quarter, over 53 million consumers had opted into the program and more than 5 million merchants accepted it at checkout.
Vantiv (NYSE: VNTV)
Vantiv, Inc., through its subsidiary, Vantiv Holding, LLC, provides electronic payment processing services to merchants and financial institutions in the United States. It operates in two segments, Merchant Services and Financial Institution Services. The Merchant Services segment offers merchant acquiring and payment processing services, such as authorization and settlement, customer service, chargeback and retrieval processing, and interchange management to merchants, and regional and small-to-mid sized businesses. The Financial Institution Services segment offers card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine driving, portfolio optimization, data analytics, and card program marketing, as well as network gateway and switching services. Vantiv, Inc. was incorporated in 2009 and is headquartered in Cincinnati, Ohio.
Square Inc. (NYSE: SQ)
Originally a simple payment processor aiming to offer merchants hardware that accepted plastic at the point-of-sale, Square has been transformed and continued to innovate in the payment and merchant processing space. The company has introduced software that allowed Square vendors to process EMV chip-embedded cards faster and introducing platforms that are specific to different merchants' needs, like Square for Retail. It has also been very successful with Square Capital program offers small- and medium-sized businesses microloans not often available for these businesses and Instant Deposit service that allows its clients to receive funds instantly upon swiping a customer's credit or debit card. Square also acquired Caviar to service the restaurant segment in 2014. Square reported annual revenue growth of 39% for 2016.
For a more in-depth look into GET you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/10/23/hedge-your-money-with-fintech-3-2/
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USA News Group
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