CUEN) Team up to bring Fintech solutions to over 32,000 bodegas across the US

by James · October 6, 2022

By Spotlight Growth

Detroit, Michigan — Live News — Benzinga

The average American consumer may not give much thought to access to financial services. But it is for consumers underbanked or unbanked, the very high costs of relying on alternative financial solutions, such as payday loans, check cashing services, money orders and pawnshop loans, can be astronomical and create a vicious cycle of financial pain that many will likely never escape.

According to a report conducted by the Federal Reserve Bank of America, it was found that 22% of American adults were under or unbanked. This means that 63 million Americans either have no bank accounts at all, or may have some kind of account with a banking institution, but still rely heavily on alternative financial services.

While the report found evidence of underbanked and unbanked consumers across all income levels, the overwhelming majority of these consumers were in the lower income bracket. These consumers were also identified as having less education or being racial or ethnic minorities, according to the Fed report.

However, there is some good news for unbanked and underbanked consumers. The rise of financial technology, or fintech, has vastly expanded digital financial services that can help bridge the gap and allow these consumers to ditch payday loans and other predatory financial products.

In accordance Allied Market Researchthe global fintech market was valued at $110.57 billion in 2020 and is forecast to reach $698.48 billion by 2030. This represents a compound annual growth rate (CAGR) of 20.3% between now and 2030.

OLB Group (NASDAQ: OLB ) and Cuentas (NASDAQ: CUEN ) are two fintech companies that recently announced a strategic partnership to help extend high-quality fintech services to the underbanked and unbanked communities.

Break down the strengths and key values of OLB Group and Cuentas that will be leveraged in their partnership

Leveraging their respective strengths and focus within the vast world of fintech, OLB and Cuentas act as a solid complement to each other’s business plans. OLB’s omnichannel payment processing platform, combined with Cuentas’ expertise in digital financial services and established relationships with major financial firms, provides a unique opportunity to help millions of US consumers access fintech solutions that may not be readily available to them otherwise.

OLB Group:

OLB is an integrated provider of financial technology and payment processing services primarily serving small to mid-sized merchants in the United States. Fintech company’s Omnisoft the platform offers cloud-based commerce solutions, which can be used for transactions that take place online, in-store or on a mobile device.

OLB’s Omnisoft platform is an established solution that supports over 10,500 active merchants in all 50 states. In 2021, these merchants completed over 28.5 million transactions with a combined gross value of around $1.36 billion.

Outside of Omnisoft platformOLB’s Evance subsidiary (https://evanceprocessing.com/) will play a major role in the partnership with Cuentas. Evance is a payment processing solution that allows merchants to accept payments from tablet-based points of sale, mobile payments from services such as Apple Pay, and more.

In total, OLB has a robust portfolio of subsidiaries covering payment gateway solutions, equity financing, short-term loans, cryptocurrency payment solutions and more.

News:

Cuentas offers digital finance and e-commerce solutions primarily to the underbanked and unbanked Hispanic, Latino and immigrant populations. The company’s offerings include prepaid debit cards, ACH and mobile deposits, cash transfer services, peer-to-peer money transfers and more.

The Cuentas General Purpose Reloadable (GPR) card has a digital wallet integration, as well as discounts and rewards for making purchases at major physical and online stores. Furthermore, Cuentas is an official partner with VanillaDirect Loadwhich allows Cuentas customers to reload their GPR cards at a network of over 50,000 retailers across the US, such as Walgreens, CVS, Walmart, 7-Eleven and more.

Using the Cuentas app, consumers can access discounted Western Union (NYSE: WU) money transfer services, discounted retailer gift cards and game subscriptions (Xbox, PlayStation, etc.), rewards points from purchases and international long distance calls, and more.

In June 2022, Cuentas completed the acquisition of a 19.99% stake in Cuentas SDI, LLC, the owner of SDI Black011 assets. SDI is a leading provider of prepaid portal and digital financial services, maintaining a robust nationwide distribution network of over 32,000 bodegas and convenience stores across the United States. In 2021, SDI produced over $8.2 million in revenue from its vast dealer network.

OLB & Cuentas: The partnership structure

On August 22, 2022, OLB and Cuentas officially entered into a software license and transaction sharing agreement deal, where both fintech companies will establish a merchant services relationship to reach bodegas and convenience stores across the United States. According to the agreement, OLB will sell or lease its sales points to sellers within Cuentas’ SDI network of 32,000 bodegas. Cuentas will look to incorporate and leverage its loadable debit card solution on OLB’s POS platform.

Cuentas will be tasked with marketing the OLB-branded product platform as a white-label app for payment processing and debit cards. OLB will look to develop Cuentas’ mobile application and related products as an Application Programming Interface (API). This means that Cuentas will have access to databases and services to allow app users to register, obtain approval and complete the onboarding process to access the Cuentas GPR, mobile app and mobile wallet.

“We are delighted to finally say that Cuentas has obtained, under contract, the ability to diversify its products under Cuentas.com serving the current mobile app, available in Android and IOS. Cuentas.net will serve the mobile payment segment. Cuentas Mobile will serve the mobility customers who will be able to activate their mobile phone services under the Cuentas family of products to become their financial services provider,” said Arik Maimon, Cuentas co-founder and interim CEO.

OLB and Cuentas have agreed to a 50/50 profit split on all net income generated from the partnership. On the OLB side, net revenues will be generated from the sale or rental of POS devices to Cuentas SDI resellers, services and products from Cuentas’ white label platform, GPR transshipment fees and more.

Cuenta’s shared net revenue will come from reload purchases made through OLB POS devices across the SDI network, digital retail products sold through an OLB POS device, mobile activities and more.

The partnership is believed to be potentially lucrative for both companies. OLB estimates that the partnership will generate annual revenue of between $8 million and $10 million when the joint services officially launch sometime in December 2022 and into Q1 2023.

Ronny Yakov, CEO of OLB Group, said: “We at OLB Group see the opportunity to expand our merchant service base in a market in which we currently do not have a footprint, and also offer existing products and services to these bodegas and convenience stores. as an additional stream of revenue in addition to the 10,500 merchants that we currently serve.”

OLB already has a record year of income so far into 2022

OLB has seen enormous growth in top line and bottom line financial results through the first six months of 2022. Through the end of June 2022, OLB generated total revenue of $17,158,849 with an EBITDA of $602,643 and an adjusted EBITDA (adjusted for stock compensation) of $745,169.

Compared to the results for the same period in 2021, total revenues increased by 239.11% YoY, EBITDA jumped by 145.17% y/y and adjusted EBITDA results showed a growth of 163.11% YoY. Here is the full overview of OLB’s financial results for both six-month periods:

Apart from top-line and bottom-line results, OLB has no corporate debt, has a cash position of $3.6 million and reports strong insider ownership of 32% at the end of Q2 2022. In addition, 98% of OLB’s revenue is generated from its profitable e -trading businesses, which management estimates will continue to grow in the coming quarters.

First half of 2022 financial results give OLB an annual revenue run rate of $36 million, compared to just $9.6 million ARR for 2021. That represents a massive 275% growth in 2022 ARR compared to 2021. Finally, OLB management estimates total revenues from 2022 to come in a range between $36 million and $38 million.

Considering the expected $8 million-$10 million annual increase in operating velocity from the Cuentas partnership, coupled with the company’s expectation of $35 million in revenue in 2022 (versus 2021 revenue of $16.71 million), OLB’s year-over-year revenue comparisons . be significant – attract more investor interest.

Overall, the OLB and Cuentas partnership is a great opportunity for both companies. The huge bodega footprint across the United States represents an excellent opportunity for the partnership to upgrade these local merchants into formidable financial centers for unbanked and underbanked consumers. Furthermore, the current framework being developed by OLB and Cuentas is highly scalable and can be deployed to other markets to serve unbanked and underbanked communities around the world.

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