The technology sector has powered higher on the back of the notorious FAANG stocks (Facebook, Amazon, Apple, Netflix, and Google) over the past several years. But areas of the cloud tech revolution have started to threaten to take over the leadership role.
In this space, the payment technology plays could be the most interesting of the lot. Today, we look at three small-cap plays in that space that could be set to explode higher in coming weeks: Today, we will look at three interesting examples and case out the space given the powerful potential we see ahead: Square Inc (NYSE:SQ), Comepay Inc. (OTCMKTS: CMPY), and Bottomline Technologies (NASDAQ:EPAY).
Square Inc (NYSE:SQ), for a little background, bills itself as a company that provides payment and point-of-sale solutions in the United States and internationally.
The company’s commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions.
It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Chip card reader, which accepts EMV chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions.
The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data.
SQ hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
Square Inc (NYSE:SQ) generated sales of $882.1M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 8.2% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.2B against $1.9B, respectively).
Comepay Inc. (OTCMKTS: CMPY) provides Internet acquiring and support services. The company is involved in facilitating instant payments and internet based payment transactions through kiosks, mobile interfaces, and Web-based applications.
In addition, the company leases and sells cash registers and point of sale (POS) systems, including its recently developed proprietary multifunctional smart POS fiscal cash register system. It processes approximately 10 million customer payments per month and has approximately 12,500 kiosks across Russia.
The Comepay group of companies including Comepay, RP Systems, M-NN LLC and Chek-online have been operating for over 11 years providing internet acquiring services and support, facilitating instant payments and internet-based payment transactions via kiosks, mobile interfaces and web-based applications such as electronic wallets.
The Company also leases and sells cash registers and Point of Sale (POS) systems, including its recently developed proprietary multifunctional smart POS fiscal cash register system. Combining proprietary software and equipment, Comepay processes over 10 million customer payments per month and presently has more than 12,500 kiosks across Russia. The companies are currently focusing their planned business expansion on the smart POS fiscal cash register system called “Cassatka” in order to help businesses comply with newly released Russian taxation legislation, 54-FZ which requires 1.2 million businesses in fiscal 2018, and a further 1.4 million businesses in fiscal 2019 to install new, federally compliant on-line cash registers.
The Cassatka, Comepay’s multifunctional smart POS online fiscal cash register can process payments and meet fiscal data storage requirements for participating businesses. It is a convenient and cost competitive solution for businesses to meet the new federal taxation requirements in Russia, and is currently being manufactured for distribution prior to June 2018. As the companies expand their business model, we expect to offer blockchain acquiring services and also to accept payments in multiple crypto currencies on the Cassatka.
The Comepay group of companies presently earn revenue from a variety of channels including fee based commissions on payment processing for both cash and debit card payments, software licensing, kiosk placement fees and other rental fees for cash registers and associated equipment.
Bottomline Technologies (NASDAQ:EPAY) promulgates itself as a company that provides software as a service based solutions.
It operates through four segments: Cloud Solutions, Banking Solutions, Payments and Transactional Documents, and Other. The company’s products and services include Paymode-X, a cloud-based payment network, which allows businesses to transition to electronic integrated payables; and cloud-based financial messaging solutions that enable banks and corporations to exchange financial information, such as payment instructions, cash reporting, and other messages to facilitate transaction settlement.
It also provides digital banking solutions that provide payments, cash management, and online banking solutions to financial institutions; and cloud-based legal spend management solutions and services that integrate with claims management, and time and billing systems to automate legal invoice management processes. In addition, the company offers cyber fraud and risk management solutions that monitor, replay, and analyze user behavior and payment transactions to flag and stop suspicious activity in real time; and payment and document automation solutions to automate a range of business documents and supply chain processes, as well as related Web-based delivery and document archive.
Further, it provides healthcare solutions for patient registration, electronic signature, mobile document, and payments; and consulting, project implementation, and training services, as well as sells printers, check papers, and magnetic ink character recognition toners. The company serves customers in the banking, financial services, insurance, healthcare, technology, retail, communications, education, media, manufacturing, and government industries in the United States, the United Kingdom, Continental Europe, the Asia-Pacific, and the Middle East.
The context is a bit of a bid, with shares acting well over the past five days, up about 3% in that timeframe.
Bottomline Technologies (NASDAQ:EPAY) managed to rope in revenues totaling $104.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 10.1%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($96.1M against $103.1M, respectively).