The mobile payments market
continues growing by leaps and bounds as more and more consumers worldwide put
away the card and pull out their smartphone or tablet to settle up. The rise of
Alibaba’s (NYSE: BABA) Alipay, the biggest online payment platform in China, as
well as the recent rollout of Apple’s (NASDAQ: AAPL) Apple Pay, are striking
hallmarks of a massive, underlying trend that has even big banks now realizing
it is essential to adopt a mobile-first strategy that focuses on consumer
experience. Banks handled roughly $410 trillion in noncash transactions last
year, or more than five times global GDP, a figure estimated to climb to around
$780T by 2023 (Boston Consulting Group Perspectives) and RBS (NYSE: RBS)
estimated last year that the mobile payments segment is growing at around 58.5%
annually, making the space extremely attractive for banks and non-banks alike.
The size of the domestic mobile
payments market alone is on-track to hit upwards of $90B in the next three
years (Forrester Research), or a 600%-plus rise over the $12.8B spent in 2012.
Globally, alternative payments are even set to overtake credit and debit card
transactions, according a recent study by WorldPay, rising to as much as 59% or
more of the overall online alt-transaction space by 2017, with e-wallets set to
claim around $1.65T over the same interval, driven by factors like 44% of all
payments in China being made using e-wallets (Alipay is responsible for some
30% or more of this entire space). As smartphone penetration climbs beyond 54%
in North America during coming years (the highest ownership rate for
smartphones anywhere on earth), payment schemes like PayPal (57% of the market)
will help mobile payments grow to some $117B by 2017.
Starbucks (NASDAQ: SBUX) was
recently noted for claiming over 90% of the mobile transaction space in the
U.S. during 2013, with some $1.3B in business done overall thanks to their
early adoption of relevant technologies and systems. That is a sizeable chunk
of the market and an enviable lead amid a space doing 50% plus growth numbers,
as more and more consumers opt to use their mobile to pay. Dunkin’ Donuts
(NASDAQ: DNKN) is looking to emulate the success of Starbucks in this area with
their own App and systems, taking full advantage of their already successful
loyalty points program, in order to secure more of the mobile market.
One of the most important aspects
to this entire mobile payments revolution that is not as widely talked about is
how the seamless integration of information and technology allows companies to
not only deliver granular, big data-driven situational awareness of their
business architecture, but to enhance customer engagement simultaneously.
Naturally, ease of use is a major driver here for consumers, with simplified
point-of-sale (POS) interactions allowing for eye-catching digital menus, as
well as similar benefits to proprietors, with the elimination of additional man
hours, otherwise wasted dealing with antiquated payment system-related
busywork.
Net Element (NASDAQ: NETE), the
owner/operator of TOT Group, is one of the more compelling plays in this sector
today, with extensive groundwork already completed in mobile payments and
value-added transactional services. TOT Group’s various segments cover all the
major bases. Unified Payments is a credit and debit card-based payment
processing provider for merchants. Aptito is an all-in-one, cloud-based,
next-gen digital POS solution and smartphone App. TOT Money is a mobile payment
processor/mobile commerce provider, helping wireless carriers, content
providers and merchants handle transaction payment, aggregation and
distribution.
The company recently revamped their
Aptito POS platform, which uses iPads as the deployment vector, bringing full
iOS 8.1 optimization and a host of new features to the table, features that are
capable of tapping into the real business analytics and management benefits
enabled by modern POS systems. These kinds of situational awareness
capabilities have hitherto not really been accessible to most SMEs due to cost,
but the new Aptito 2.0 framework (in conjunction with Unified Insights) makes
it an easily affordable snap, while also enabling even small businesses to
execute attractive, highly engaging interactive kiosks, tableside ordering
systems, and digital menus. Full social media integration, mobile ordering,
reservations, scheduling, and even payroll systems are possible with Aptito
2.0, allowing revolutionary workflow advancements like waiters being able to
place orders from their mobile device and have it sent directly to the kitchen,
or allowing staff/management to do comprehensive inventory management from
anywhere.
Inventory management in a
restaurant for instance is a huge issue, but Aptito 2.0 allows for things like
auto-ordering via email to distributors, vendors or merchants, all seamlessly
synchronized with the POS system. Digital menus using such a system allow for
instant updates, cost-free menu changes, and real-time tracking of what is
available, reducing overhead like never before, while delivering a superior
customer experience and even cutting out confusion or wasted effort by staff
members. Such a system can have a transformative effect on a business like a
restaurant and it also allows managers/owners to get a solid handle on costs,
while really getting to know their clientele’s spending habits and tastes (a
marketing Godsend).
Extremely affordable self-order
iPad Kiosks from Aptito allow for eye-popping graphics and pictures of items,
simultaneously creating multiple points of sale and cutting down on the staff
workload, with everything synced up and tracked via Aptito’s iPad POS software,
or even sent directly to the kitchen staff. For merchants, the hybrid
architecture of Aptito 2.0, which allows for “offline mode” (compensates for lost
connections to the cloud, leveraging Net Element’s local server solution to
provide nearly seamless uptime via synching to the Amazon cloud), is a massive
advantage. Net Element even tailors their deployments to suit the individual
business type, representing a significant cost and complexity savings over
traditional PC-based POS systems.
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
