My #1 Fintech Play for the Great Reset

1 SPECIA L REPORT. My #1 Fintech Play for the Great Reset How To Triple Your Money As Cash Goes Digital By Jeff Brown A Brownstone Res ea rch Pub lica tion Special Report 2021. My No. 1 Fintech Play for the Great Reset : How to Triple Your Money as Cash Goes Digital By Jeff Brown, Editor, The Near Future Report It was a $ billion admission of defeat. transformative acquisitions in the history of the technology sector. That's the amount eBay paid to acquire the peer-to-peer payment platform PayPal in eBay went from having a stagnant online October 2002. At the time, this was a surprising auction platform to being a fast-growing, digital acquisition eBay is an online auction company. payments company. Spending over $1 billion on what seemed to be an auxiliary business appeared irrational At the time of eBay's acquisition, digital payments especially considering eBay had its own were a nascent industry.

2 Remember, PayPal . payments company at the time called Billpoint. which is a goliath in the digital payments space today had only been founded four years earlier. But eBay knew that improving the ease of paying And the company had only gone public in 2002. sellers was critical for its future success. eBay is a marketplace, after all. But before PayPal and Digital payments were brand new, but PayPal's Billpoint, buyers on eBay would send a check growth phase was about to kick in. This acquisition or money order through the postal service energized eBay's stock, propelling it nearly 300%. to the seller, who then had to go cash the check higher in the two years following the merger. before sending the product. This increased That rise was fueled by PayPal. In 13 years under the amount of time for buyers to receive their the eBay corporate umbrella, PayPal grew from products and created a hassle for the sellers.

3 A $ billion company to an enterprise value A digital transfer of money solved the delay in of $40 billion when it was spun out and started payments. That's why eBay bought Billpoint and trading as a separate entity in July 2015. then partnered with Wells Fargo. But Billpoint And now history is about to repeat . was difficult to use anywhere other than eBay. And even though fees were cheaper, sellers and I'll show you in a minute how the pandemic sped buyers preferred PayPal's flexibility. up the growth of digital payments across the world. And I'll also tell you about a company that Seeing PayPal's popularity, eBay decided to buy wants to get deeper into the digital payments space the company. In essence, eBay admitted that and recently made a transformative acquisition to Billpoint had failed. But the acquisition changed make itself a digital payments powerhouse.

4 EBay's trajectory. And it was one of the most The Near Future Report 2. Welcome to The Near Future Report of this year, it peaked around $41,000. That's a 178x return, and that's not a typo. Welcome to The Near Future Report. I'm Jeff Brown, your editor. More broadly, Fintech isn't just about blockchain technology; it is used to describe new technology For nearly 30 years, I worked as a technology that seeks to improve the speed, delivery, and executive for firms like Qualcomm, NXP cost of financial services. Semiconductors, and Juniper Networks. I've earned degrees from Purdue University and the Some examples of Fintech are the following: London Business School. Contactless payments I've also received professional certificates Peer-to-peer (P2P) payments from MIT, Stanford, and most recently the Mobile-only stock trading apps like University of California, Berkeley, School Robinhood of Law.

5 And I am also an alumnus of Yale University's School of Management. Robo-advisors sites like Betterment that help streamline retirement savings I'm also an active angel investor in early stage Cryptocurrencies technology companies. I've invested in dozens Blockchain technology of private deals. I don't tell you all this to brag. But with so many so-called technology experts Smart contracts out there, it's important that readers know I'm The list could go on for pages . truly committed to the world of bleeding-edge technology. Because of all the ways technology can make financial services better, Fintech is growing With this research service, we look for stable, quickly. According to research firm IndustryARC, mid- to large-cap companies with products demand for Fintech services will grow as much enabling the newest technological trends.

6 We can as 30% a year from 2019 to 2025. In 2018, the think of these as sleep well at night stocks with Fintech market was around $150 billion. At that Great growth potential. growth rate, demand for Fintech services will be In the past years, we've covered technology $950 billion annually by 2025. trends like 5G, artificial intelligence, and cloud- But that's peanuts compared to what Goldman based software services. Sachs believes will happen to the Fintech market. It And in this report, we're focusing on a trend forecast that Fintech could disrupt $ trillion of that has exploded over the past year: financial revenue at traditional financial services companies. technology ( Fintech ). Fintech services are just hitting the inflection Fintech : A Big Trend in 2021 point of mass adoption as well. In 2019, 64% of consumers worldwide have used one or more Fintech has been a key area of research since Fintech platforms That's up from 33% in 2017.

7 I began this business in 2015. In fact, the very But that 64% is still well below the 96% of first recommendation I made as an analyst was consumers who are aware of at least one Fintech in bitcoin back in the summer of 2015. Bitcoin service. was trading around $230 at the time. At the start The Near Future Report 3. And adoption has increased even more this Fintech firms in the is our portfolio holding past year The pandemic hastened the use Square (SQ). Square's payment platform of technology in the financial realm. Fidelity uses technology to make it easier for small National Information Services saw a 200% businesses (like bars and restaurants) to collect increase in new mobile banking registrations. payments from customers. And from there, And reportedly, many older Americans have Square makes it easy for businesses to pay their become more comfortable with these apps and employees and track expenses.

8 Even paying bills online over the past six months. Square's Cash App makes it easy for employees Worldwide, the University of Zurich estimated to get paid and spend money instantly. Cash App that an additional million Fintech also allows P2P payments and even enables users smartphone applications have been downloaded to make investments in stocks and bitcoin. every day this past year. Cash App usage is increasing and is catching up to The End of Dirty Paper Bills PayPal's Venmo another popular P2P payment platform in terms of gross payment volume. It's easy to understand why Fintech had a banner year in 2020. During the pandemic, most people Get this. In Q4 2019, Cash App saw $361 million didn't want to deal with dirty money or even in gross revenue. By Q2 2020, that figure was checks. These physical objects are just one more $ billion.

9 In 2019, Cash App had 60 million possible way to spread the virus. downloads. In 2020, that figure was 90 million. And not surprisingly, one of the main reasons I show this to first congratulate readers who people downloaded Fintech smartphone followed my April 2019 recommendation to buy applications in such record numbers was to make Square. But this also demonstrates the speed at payments either to pay bills or send money to which this technology is being adopted. someone else (P2P transactions). While this report's company is a competitor to A survey of 1,000 Americans found 50% Square in some areas, I want to make it clear that had decreased their use of cash last year there is room in the digital payments space for significantly. Americans aren't alone, as Fintech both companies to succeed. There is no need for firm Link found that 75% of British people were us to pick sides.

10 And I'm still very excited about using less physical cash, while 54% were trying to Square's future growth prospects. avoid cash altogether. Generally speaking, these two companies go after And a 2,000-person survey done by Fintech different business segments. Square started by disrupter Plaid found 59% of Americans are catering to small businesses, and this report's using more Fintech apps to manage money than company caters to large enterprises. And both are before COVID-19. And 73% of Americans say now working their way into mid-sized businesses. Fintech is the new normal.. The company I'm recommending to subscribers The digital payments segment is the largest in this report is the financial services firm- within Fintech , and it is the segment we're going turned- Fintech giant fiserv (FISV). to focus on in this report.