Virtually every Australian adult withdraws cash from an ATM on a regular basis. And the times we don’t use cash are usually bridged by the use of debit or credit cards for daily transactions.
Think about the market size of these simple services alone.
Now consider about a sub-$20 million capped company on the ASX making major inroads in these two areas, plus several more.
Stargroup Limited (ASX:STL) are competing in the ATM and cashless payments playoffs — and nabbing victory after victory.
Its latest win was announced in early September — a Joint Venture with DigitalX to develop Bitcoin ATMs. The ‘Two-Way ATM’ solution will assist users or investors to buy and sell Bitcoin with ease.
There are currently fewer than 20 ATMs in Australia that can facilitate Bitcoin transaction, with conversion fees in the 4-8% range. Of these, most are only capable of one-way transactions… meaning the ability to add Bitcoin to their wallet via the ATM.
The new ATMs resulting from the JV will not only enable users to acquire Bitcoin but will also instantly convert them to Australian dollars via the ATM.
Typically, Bitcoin users looking to sell the asset have to wait days to access the cash using online digital currency exchanges. So this will almost certainly address a real ‘pain point’ for those invested in the cryptocurrency, specifically the fact that while Bitcoin can be bought with relative ease, it is difficult to cash out.
In June, the company increased its ATM network by a further 35% with the acquisition of Fastcash ATM. This took their total number to 512 ATMs across the country… and their projected annualised 2018 revenue from $17.9 million to $20.1 million. These 512 ATMs are estimated to process in the vicinity of 4.5 million transaction a year.
Those are some big numbers, and that’s just for STL’s ATM business alone.
It should be noted, however, that this is an early stage tech company and success is no guarantee. Investors should seek professional financial advice before making an investment.
But as we hinted at earlier, it’s not just the ATM space that the small-cap is looking to dominate. It also has three other product arms including Star Payments, StarPOS and StarLink.
StarPOS is an EFTPOS and payWave technologies provider, as well as developer of the source code in its terminals via its five year distribution agreement with West International AB, a Swedish NASDAQ listed company.
Then there’s StarLink — one of a handful of independent ATM processing providers in Australia outside the major banks. The goal here is for STL to attract more IADs and smaller banks to StarLink, which currently has a network size larger than some of the banks and is the #2 independent operator
This is made all the more possible by STL’s acquisition of Indue in May.
Lastly, STL’s Star Payments arm is focused on advanced cash monitoring technologies to monitor ATM performance and cash replenishment cycle under development — a market currently dominated by one or two large providers who have been providing services to IADs (independent ATM deployers) unchallenged for quite a while.
To get more of an idea of STL’s background you can read our article from last year. At that time STL had exceeded all expectations by ticking off its 12th consecutive quarter of record revenue growth.
But for now, it’s time to check out the latest and greatest from this small-cap superstar: Stargroup Ltd
