PaySafe enters crypto scene as it survives stock collapse
Paysafe, the international payments platform, has witnessed its stock trading as of late under its brand new symbol (NYSE: PSFE) starting from March 31st. The firm is currently a reverse merged business combination from the SPAC which was previously known as Foley Trasimene Acquisition Corp. II. The latter was owned and run by Bill Foley, the well-known American investor. And even though SPAC was thriving in 2020, this new year has seen its collapse.
Each time SPACs finalize the combination in order to begin trading with a new symbol, the stocks often see more or less -50% in initial sell-offs which can last up to 8+ days. The imminent dilution from all investors and sponsors can cause deep haircuts in such cases.
Despite all of that, Paysafe is possibly one of the only companies that will be able to flourish as a publicly traded stock because of the powerful tailwinds which are bringing growth in iGaming. Brave investors are now able to look into an opportunity in this stock.
Paysafe is, in short, a combination of many platforms including Skrill and Neteller, the digital payment platform. They operate in more than 30 countries, amassing over 120 different markets. Neteller found success in the United States before iGaming was banned, however it has found international success since then. Once iGaming bans and regulations are eased within the States, Neteller can easily make a comeback and establish itself once more in the American market.
The likes of PayPal (NASDAQ: PYPL) and Square (NYSE: SQ) eschew the risks involved with iGaming transactions and tend to steer clear of it. On the other hand, Neteller came about because there was a need to establish a digital wallet and processor for the iGaming and online gambling scene. These transactions do not actually come with many risks since the payments need to be deposited beforehand. The firm is now hoping that iGaming in the United States is able to grow at a compound annual growth rate of about 52% within the next 4 or so years.
As of right now, Paysafe is expecting $103bn in transactions throughout this year, with 11% CAGR until 2023. The iGaming sector is quite profitable and Paysafe is piling some decent transaction fees, and even obtaining fees from the online gambling websites and operators that it is woking with. Many states have been slowly but surely legalising iGaming, so it comes as no surprise that the likes of Paysafe will flourish in the market.
Furthermore, Paysafe revealed last week its new deal with Coinbase, the cryptocurrency exchange site. This is a huge move for the firm as the Paysafe Skrill digital wallet extends its reach in the USA to over 37 states which have allowed cryptocurrency transactions thanks to Coinbase. Skrill has also unveiled the release of its Skrill VISA Prepaid card this year.