Net Element, Inc. (NETE) Gaining Traction in Evolving Mobile Payments Marketplace

A recent article by Marco della Cava in USA Today draws attention to how mobile payment options are evolving. Establishment payment options such as QR code-based apps remain the preference of many retailers. But there is growing traction in an alternative known as near-field communication (NFC) options, such as Apple Pay and Google Wallet. This momentum can be seen in cases such as how many mobile users signed up for Apple Pay within hours of its release.

After Apple Pay was debuted to mobile consumers in the release of iOS 8.1 on October 20, there was a flurry of activity. Over 1 million credit cards were signed up in the service’s first 72 hours post-release. And as della Cava points out in the article: even though some merchant parties are being slow to adapt Apple Pay due to varying factors, the powerful force of consumer expectations cannot be disregarded. As Stern Agee analyst Tom McCrohan opines in the article: as NFC options like Apple Pay acquire a wider base among retailers, competitors will be incentivized to readapt and also offer them.

Florida-based Net Element (NASDAQ: NETE) is one company which has been riding this wave of innovation. In September, the company announced the integration of Apple services into its point-of-sale payment acceptance hardware and software. With this alignment, customers will be able to use their iPhone 6, iPhone 6 Plus, or Apple Watch devices for payments to merchants which use Net Element’s mobile payment system provided by Net Element’s subsidiary TOT Group. This timely development, along with increasing numbers of customers who use Apple Pay and other similar options, will help position Net Element for market gains as the mobile payments landscape continues to evolve.

In recent months, Net Element has taken steps to secure its own short-term and long-term positions. As noted in company CEO Oleg Fifer’s letter to NETE shareholders, a few of these milestones were:

•           Elimination of almost $15.9 million in debt from Net Element’s balance sheet with Net Element’s debt exchange transaction with Crede Capital Group

•           Filing of a universal shelf registration statement with the SEC, which if approved by the SEC, would allow Net Element to raise financing of up to $50 million for future business activities

•           Substantial brand exposure to the investment community provided through coverage in media outlets such as USA Today, TheStreet, and 24/7 Wall St

•           Attainment of an $11 million credit facility from Russia’s largest private bank, Alfa-Bank, which bolsters support for Net Element’s expansionary activities with TOT Money, a supplier of SMS messaging and mobile billing solutions and a part of TOT Group

•           Achievement of company profitability, in which Net Element recorded a net income of $1.3 million in Q2 2014 compared to a net loss of $20.2 million in Q2 2013

Looking to the future, Firer expressed his confidence about Net Element’s growth potential. He also reinforced that Net Element would continue to execute current initiatives, as it pursues new strategic opportunities that will strengthen its growth opportunities and guide it toward sustained profitability.

For more information, visit: www.netelement.com

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