- Cashless payments continue growing
- Technology to handle debit and credit card payments
- Aptito restaurant management solution driving sales
The payment system has come a long way from the time when transactions were mainly settled in specie. In antiquity and during the medieval period, purses glittered with gold and silver coin. Then, paper money, used by the Chinese a thousand years before, began to appear in 17th century Europe. From the late Renaissance to the end of the 20th century, banknotes and, increasingly, checks were used to transfer funds and make payments. Now, with the internet girding the globe, these media are being replaced by electronic means, like those offered by innovative fintech, Net Element, Inc. (NASDAQ: NETE). This global financial company provides merchants with the technology to accept funds electronically through an omni-channel environment that includes both online and offline payments.
A dollar paid may be a dollar received, but not all payments are processed in the same way. A typical debit card transaction can actually be processed in two ways, online and offline, which terms, misleadingly, differ from their colloquial meanings. In an online transaction, a consumer authorizes a payment by keying in her PIN at the point-of-sale after swiping a debit card through a magnetic card reader. The transaction is approved in real time, the customer’s account is adjusted immediately, and money is transferred to the merchant’s account in two to three business days.
However, at present, processing debit transactions “online” is only available in the brick-and-mortar world where the consumer is physically present. Typically, you cannot do a PIN transaction on the internet, although already, ecommerce PIN debit solutions are starting to make their appearance. In an offline transaction, on the other hand, no PIN is involved. Instead, the consumer will be required to sign a receipt. Offline debit transactions are processed through the networks operated by credit card providers, such as Visa, MasterCard and American Express.
Whether it be online or offline, Net Element can handle it. The solutions offered by the company enable merchants of all sizes to accept and process over 100 different payment options in more than 40 currencies, including credit, debit and prepaid payments. Net Element also provides merchants with value-added services and technologies including integrated payment technologies, point-of-sale solutions, security solutions, fraud management, information solutions and analytical tools.
The company has been reporting very strong results for its North America Transaction Solutions (NATS) and Online Payment Solutions (OPS) divisions. In 2016, NATS revenues reached $42.1 million, an increase of 54 percent over 2015. Sales to small- and medium-sized enterprises (SMEs) were particularly good. The division’s product offerings include Aptito, a cloud-based Software-as-a-Service (SaaS) restaurant management solution. OPS also performed well. Revenues rose by 63 percent, in 2016, to reach $6.2 million. Total revenues for 2016 were $54.3 million, which represented a 35 percent year-over-year increase.
At its current stock price of $0.44, Net Element’s market cap is approximately $7.8 million, which is just 14 percent of 2016 revenues. SeeThruEquity, in an April 2017 report, set a target price of $2.45. In a world that is increasingly embracing cashless payments, Net Element is very likely to hit that target.
For more information, visit the company’s website at www.NetElement.com
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