The Next PayPal

By Matthew Milner, on Wednesday, May 13, 2015

PayPal is one of the Internet’s great success stories.

An online payment solution that got its start in 1998, PayPal was acquired by eBay in 2002 for $1.5 billion. Its early investors made a fortune.

Today, PayPal generates $8 billion in revenues a year—and according to JP Morgan, its current value is approaching $50 billion.

But who wants to hear about a great investment they didn’t make?

Instead, let’s look at an investment you still can make:

Some are calling it “The next PayPal.”

In fact, the former CFO of PayPal, David Jaques, is so convinced about this new company’s potential, he joined as its Chairman and CFO.

As Jaques said recently:

“This feels like a similar path to what I experienced at PayPal nearly two decades ago.”

A Trillion-Dollar Market

Seventeen years ago, PayPal solved a major problem:

It allowed two parties that didn’t know each other to send and accept payments online—quickly, inexpensively, and securely.

As the popularity of online commerce increased, PayPal grew tremendously. Today, it enables about $200 billion in transactions each year.

But despite PayPal’s growth, and despite new solutions like Apple Pay and Square, massive gaps and inefficiencies in payment technologies still persist…

For example, entities like city governments send out parking tickets via email… but they have no cost-efficient way to accept payment online.

And many service providers, from graphic designers to lawyers, aren’t set up properly for e-commerce: they don’t have a secure website, and since they work remotely, they’re not able to “swipe” a customer’s credit card in person.

Merchants and entities like these generate a trillion dollars per year—and yet, they’re severely limited with respect to their online payment solutions:

If they set up a secure website, they can accept credit cards online—but their merchant fees are as high as 3.5%, and their delays in getting paid are 3 to 4 days…

Or they could take credit card information by phone and enter it online—but that’s time consuming, and it’s not secure.

But now, a new company called Digitzs is aiming to change everything…

Digitzs

Digitzs is an online and mobile payments solution where business owners request money from their customers via email.

When customers click on a link inside the email, they land on a secure page where they can enter their credit card information.

(The process seems very simple, but one payments expert compared it to a duck: calm on the surface, but a whole lot of paddling going on under the water.)

Instead of paying fees as high as 3.5%, Digitzs merchants can choose a range of payment methods where their fees are as low as 0%.

And instead of waiting 3 to 4 days to get paid, Digitzs merchants get paid the next day—even on Sundays.

As a consumer, this might not sound like a big deal…

But for merchants, it’s revolutionary.

Too Expensive to Switch

As Linda Perry, a former senior executive at Visa, and now an Advisor to Digitzs, says: “They’re doing things that the traditional, legacy processors just don’t do.”

Why don’t “legacy” providers offer the same features?

To explain, Digitzs CEO Laura Wagner made an analogy to the auto industry:

98% of the legacy auto companies make cars that use gasoline.

Cars that use electric energy might be more efficient, but that doesn’t mean the legacy car markers will switch…

Switching would just be too expensive.

Building a Competitive Moat

But even if the legacy providers don’t compete with Digitzs, what about competition from other upstart payment companies?

That’s where Edward Katzin comes in.

Katzin is the former Head of Global Products for Visa—and now he’s a Board Director and Intellectual Property Advisor at Digitzs.

At Visa, Katzin used intellectual property—i.e., patents—to defend the company’s business model and build a competitive moat.

He’s helping Digitzs use the exact same strategy.

As he said recently:

“Digitzs has a dual threat offering that's defensible from an intellectual standpoint.”

When it comes to online payment solutions, Linda Perry and Edward Katzin might have as good a lay of the land as anyone out there…

Which is why it may be worth your while to take a look at Digitzs as an investment.

The Details

Digitzs is currently raising capital from investors like you.

The fundraising is taking place on an “equity crowdfunding platform” called Crowdfunder.

Crowdfunder connects entrepreneurs who need capital, with people like you who are looking to make “start-up” investments with big potential upside.

Digitzs is raising $500,000, with a $10,000 minimum investment.

To explore more about Digitzs and see details about its fundraising, click here >>

Happy Investing.

Please note: Crowdability has no relationship with Digitzs or Crowdfunder. We’re an independent provider of education, information and research on start-ups and alternative investments.

Best Regards,
Matthew Milner

Founder
Crowdability.com

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