Fintech has been good to investors recently, with the
markets prizing highly leverageable “toll-taker” models that can earn
small, high-profit bits of revenue off of repeated transactions. One of
the classic examples of this model is the merchant acquirer (think
companies like Global Payments (GPN)), and PagSeguro (PAGS) is bringing a new and disruptive acquiring model to the small business market in Brazil.
No
brief article can completely capture or summarize the risks of a
company, so please do your own careful due diligence. In addition to the
risk that comes with competing with the likes of Cielo (OTCPK:CIOXY), Itau Unibanco’s (NYSE:ITUB) acquiring operations, newer entrants like SumUp, MercadoLibre’s (MELI) Mercado Pago, and now PayPal (PYPL), there are significant regulatory risks, operating/execution risks, and macroeconomic risks.
All
of that said, this is an interesting growth story, as PagSeguro has
already carved out good initial market share in the “micro-merchant”
niche and stands to benefit not only from ongoing merchant acquisition,
but increasing transaction volume and value. Fintech valuation has often
tended to exist in its own world, but PagSeguro’s growth potential
could make it worth a look from aggressive investors who can accept the
above-average risks.
Continue here:
PagSeguro Disrupting A Large, Previously Untapped Market
No comments:
Post a Comment