TIO Networks (
TSX: V.TNC,
Stock Forum) has been turning heads in the mobile payment sector for quite some time now and its CEO, Hamed Shahbazi, is gearing the cloud-based bill payment processor, to take a major bite of the mobile payment space through an untapped and highly-prospective demographic.
First, let’s talk about TIO. TIO Networks launched from Info Touch Technologies in 2006, which had begun building the “TIO Network” of self-service financial service kiosks back in 1998. The result of the company’s shift in name and focus transitioned the company from ‘kiosk solutions’ to high-value bill payment and financial services processing.
With a network of kiosks stationed in over 700 locations with 6 top tier convenience store chains such as Circle K, ExxonMobil, Alimentation Couche-Tard and Speedway SuperAmerica, TIO had a sizeable footprint in North America with over 250,000 people a month paying their bills through the kiosks.
The aforementioned expansion of services positioned the already-powerful market contender of portable payments to overtake the exploding mobile payment market made famous with Apple’s announcement of Apple Pay. In contrast to Apple however, the true genius of TIO Networks isn’t just what they serve; it’s who they serve – the under-banked.
The global demographic of the under-banked is unbelievably huge. According to a World Bank 2012 study, almost 50% of adults the world over do not have an account at a formal financial institution – that’s 2.5 billion adults that don’t have access to classical banking services. You may think this is an issue associated solely with developing economies like Kenya, where the average savings were gauged at $3.00, but this description also applies to approximately 25 million Americans.
By providing a range of financial services to these individuals at not only kiosks, but through a cloud-based mobile payment platform, TIO Networks has placed itself at the forefront of a globally advancing transaction trend that is expected to grow to $670 billion by the end of this year.
TIO Networks continues its innovation of its kiosk segment with patented processes for change-based transactions which allow the users to carry out one transaction like paying a bill with cash and use the remaining deposited cash against a future transaction. This portable transaction unit will continue to be an important part of service provision for those who cannot go through a teller.
It is no wonder that TIO Networks was a Cantech darling this year. In fact, the company won the Cantech Letter TSX Venture Exchange Tech Stock of the Year and CEO, Hamed Shahbazi, also won Executive of the year at the same event.
Fiscal 2014 was good to TIO Networks as well and saw the company pump up revenues 25% from the preceding cycle to $50.87 million with gross margins for the year also experiencing a bump to 29.4% from 21% reported a year ago. What’s really intriguing is the exponential rate of growth witnessed in the fourth quarter of 2014 where the company’s average daily processing rocketed 392% to more than $14.0 million from the matching 2013 period.
This organic growth explosion in 2014 was coupled with an extremely strategic acquisition of Globex Financial Services, a top player in bill payments and walk-up financial services, placing TIO Networks in a perfect position to take on 2015.
If results from the company’s Q1 2015 filing are any indication, TIO Networks has hit the ground running this year with revenues seeing a whopping quarterly increase of 138% to $19.68 million from the same 2014 quarter while gross profits soared 194% to $5.74 million from Q1 2014.
On wrapping the quarter, TIO Networks had $29.73 million in the till with no long term debt. The quarter also saw another acquisition of San Francisco, CA based Verifone Commerce Solutions (changesmart.com), another top provider of online payment services for U.S. consumers.
Considering TIO Networks continuing growth, increasing revenue and market potential of the under-banked demographic, this company has plenty of ceiling left on its market capitalization and smart investors should take note. I know I will be following their progress with great interest.