- 1000% revenue growth and huge new user additions quarter-over-quarter make KPAY a top idea in the digital payments space. Company operates in a huge untapped market in Indonesia where digital payment platforms may transform financial system
- Investors underestimating revenue potential from planned currency exchange, KryptoPay. News of ICO moving forward or launch of trading exchange could catalyze a big move from KPAY in coming quarter, like KODK or AMRH
The little-known Indonesian digital payments company KinerjaPay (KPAY) reported another blowout quarter in December with sales that topped the previous 3 month period by a whopping 1,100%! Traders have started to notice, but the markets have still not awarded the company for a more recent announcement - a pivot for its existing, in-platform currency called Kcoin to become a publicly traded cryptocurrency in an Initial Coin Offering (ICO) that could rocket KPAY's user growth further and even carry the company to a Nasdaq listing.
The ICO not only brings in fresh capital but also serves as inherent marketing and a user-acquisition tool for KPAY, meaning that user growth could continue to rip from already almost doubling their growth rate in the third quarter of 2017. Even more valuable, the company is jointly launching their own cryptocurrency exchange for Kcoin and other coins, called KryptoPay, adding another possible revenue source.
Other blockchain technology companies have seen immense traction in recent weeks, most recently Eastman Kodak Company (NYSE:KODK) for its planned "photo sharing cryptocurrency" called KODAKCoin. 1100% revenue growth, lower acquisition costs, and ownership of their own crypto exchange could add up to similar market awareness for KPAY in 2018 as investors realize the revenue potential with these changes.
Revenue and User-Base Growing Parabolically? +1100% in Q3
KinerjaPay is a digital payments platform in Indonesia and South Asia, and the company ha been growing at an astronomical rate in the last year. In the third fiscal quarter of 2017 ended September 30, 2017, the company posted quarterly transactional revenue of $1.76 million, an 1,183% increase over $149K in the second quarter.
User growth is accelerating as the company brings on more partners for digital payments and bill pay capabilities in a region of the world where a fraction of people have a bank account or credit/debit card. The rate at which KinerjaPay is adding customers grew 58% in the 3rd quarter; the company reported 10,962 new users compared to 6,904 new users in the same quarter of last year, demonstrating just how fast they're adding users for a small emerging company.
Digital payment solutions represent a huge opportunity in the Indonesian and South Asian market, and KinerjaPay is making a name for itself as a go-to app. As of 2013, nearly 60% of the entire bankable population in Indonesia did not have a bank account, and this will reach 113 million people by 2020. Meanwhile one-third of the population currently has access to the Internet, and with the rapid growth in Internet connectivity rates as cheap handhelds become available, this will climb to 40% in the next few years according to eMarketer.
Exchange Listing Could Increase Revenue, Lower Costs, and Take User Growth To Next Level
KinerjaPay's decision to run an ICO and own half of a cryptocurrency exchange could be the most over-looked piece of market news of the last three months considering the long-term implications. KPAY will build and launch their own cryptocurrency exchange to trade Kcoin and even alternative coins like Bitcoin. Called KryptoPay, the trading platform will facilitate the transaction volume of Kcoin with other cryptocurrencies and serve as the international platform to trade Kcoin freely on the market. This move makes KinerjaPay the first Indonesian company to have an ownership stake in an international exchange. Kcoin is already the currency of choice within the KinerjaPay platform, which includes ecommerce, peer-to-peer lending capabilities, and gaming infrastructure. Average revenue per transaction has grown from $3.34 in 2016 to $4.38 in 2017, demonstrating that metrics are moving in the right direction.
A major ownership stake in a cryptocurrency exchange is huge news, and it gives KPAY a new, revenue source; transaction and listing fees for KryptoPay could reach into the millions of dollars based on reported figures for similar exchanges like CoinBase and Bittrex. CoinBase, for example, charges its cryptocurrency exchange customers fees of 1 to 4% of transaction amounts, depending on the intent.
Turning Kcoin from a currency only available on the KinerjaPay app into a publicly available cryptocurrency should drive user growth in new ways as well. This brings down customer acquisition costs as Kcoin owners are inherently driven to use the currency within the KinerjaPay ecosystem, but also drives additional revenue through KryptoPay transaction fees. If the company can raise $3-7 million in ICO proceeds, KinerjaPay will be well capitalized to continue their user growth, and this kind of equity should bring the company closer to a Nasdaq listing - possibly the limiting factor in investor participation today.
Public companies with ties to cryptocurrencies are taking the public markets by storm, for good reason as these new currencies gain increased traction and industry validation. Most recently, Eastman Kodak Company (NYSE:KODK) revealed that blockchain would be used to build KodakOne, the company's new photo rights and royalties tracking product for digital photographers. The same for AMERI Holdings (NASDAQ:AMRH) and their introduction of blockchain supported logistics software, which sent AMRH soaring during the first week of trading in the new year.
Public market investors have yet to pick up on the implications of KinerjaPay's latest news, and combined with already accelerating user growth, KPAY has the makings of an impactful 2018. News of progress with their planned ICO and KryptoPay launch could catalyze another move higher in the coming months.
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