IPSIPay Express on track for September launch and 2023 revenues to IPSI
IPSI announces assignment of IPSIPay wallets and customers and elimination of associated debts and payment obligations; Company retains rights to “IPSIPay” brand.
CARMEL BY THE SEA, Calif., Sept. 06, 2023 (GLOBE NEWSWIRE) — Innovative Payment Solutions, Inc. (OTCQB: IPSI) (“IPSI” or the “Company”), a leading FinTech provider of digital payment platforms, today provided an update letter to shareholders and interested parties from Chairman and CEO William Corbett.
We wanted to take this opportunity to provide you with some insight into our latest strategic developments and what they herald for the future of our company.
First and foremost, our recent announcement of IPSI’s initial capital contribution of $500,000 to our IPSIPay Express™ (IPEX) joint venture marks a significant milestone for us. This initial funding not only underpins our robust confidence in IPEX’s proprietary Instant-Settlement in RealTime™ merchant processing solution and traditional credit card processing capabilities, but also provides us with an 11% equity interest in what we believe will be a groundbreaking initiative. With our subsequent $500,000 capital contributions to IPEX set for September and October of this year, we anticipate our stake in IPEX to rise to 33%.
Equally as important, we are pleased to say that we have been working daily with our IPEX partners and third-party banks and vendors and remain on track for a commercial launch this month. IPEX is likely to commence commercial operations with traditional credit card processing in so-called “high risk” sectors such as online gaming, betting and entertainment, and IPEX is aiming to launch Instant-Settlement in RealTime – a truly exciting proprietary solution providing seamless consumer-to-merchant real-time, instant settlement payments targeting these same sectors by the end of this year.
Given the extensive costs associated with traditional credit card chargebacks (which Instant-Settlement in RealTime will seek to mitigate), IPEX’s focus on launching a proprietary product to lower or eliminate chargebacks presents a distinct value proposition for potential clients. We’re not just creating a solution: we believe IPEX has the potential to redefine the financial landscape of online gaming and entertainment, offering businesses a chance to save significantly. While our immediate efforts are targeted towards specific industries, the broader vision sees the IPEX platform catering to a wider merchant base, expanding revenue streams and positioning IPEX as a versatile player in the merchant processing market.
Our IPEX joint venture with industry leaders OpenPath and eFinityPay is off to a great start. Each entity brings a wealth of knowledge and expertise to the table, and we are pleased to say that the IPEX venture partners have been working well together. IPSI brings key commercial banking contacts and access to the public capital markets. OpenPath, headquartered in Irvine, California, provides payment solutions to companies processing large volumes of online payments. eFinityPay, founded by CEO Franklin Levy and based in Los Angeles, California, specializes in delivering stable merchant processing solutions to ecommerce merchants in the online casino, sportsbook, entertainment, and video gaming businesses.
The potential revenue implications of IPEX for IPSI cannot be understated. Our market assessment, paired with initial outreach to potential customers, leads us to believe that IPEX has the capability to generate millions of dollars in revenue with high margins. This translates to the potential for substantial free cashflow distributions to IPSI and our joint venture partners. If all goes well, it is possible that such distributions could be made to IPSI this year, which would significantly bolster our cash position and allow us to plan better for the future.
As long-term stakeholders in our company are aware, for several years we have focused our efforts on building and launching IPSIPay, a payment app with associated e-wallets and debit cards that enables consumers to deposit cash, convert it into a digital form and remit the funds to Mexico and other countries quickly and securely. Our launch plan for IPSIPay was targeting lower income, migrant communities in California (notably in the agriculture industry) to empower and enable the unbanked and under-served and payment providers who service these users. As of June 30, 2023, we had achieved approximately 66,000 IPSIPay downloads and over 6,000 active users with wallets, and while we are proud of this, we have been unable to generate meaningful revenues from IPSIPay.
We are today announcing that we have executed an agreement with our IPSIPay back-end commercial vendor (Frictionless Financial Technologies (Frictionless)) and a third-party to assign all rights (including customers and associated e-wallets), obligations, debts, and liabilities under our SAAS Agreement with Frictionless to such third party. This means that, for now, we are exiting the IPSIPay line of business and relieving IPSI of approximately $325,000 in payment obligations. This move also represents the logical next step of concluding our commercial relationship with Frictionless, which began in May when we announced a transaction to unwind the equity ownership stakes that the IPSI and Frictionless had in each other and in Beyond Fintech, our previous joint venture with Frictionless. This move also allows us to focus all of our near-term efforts and resources on IPEX.
However, our agreement also provides that we will continue to own all rights to the name “IPSIPay.” We believe we have not only built brand value in the IPSIPay name but have also amassed knowledge and experience complimented by extensive market data. Our longer-term plan is to revisit the IPSIPay business with new commercial collaborators in the future when we have the cash flow from IPEX to dedicate to it. We currently envision an “IPSIPay 2.0” with even greater functionality, targeting the unbanked and underserved markets, which we maintain is fertile ground for a payment processing business. Furthermore, assuming the IPEX business goes as planned, we may consider partnering with or acquiring complimentary fintech businesses in the future.
Lastly, this past week we effectuated a 1-for-30 reverse stock split. With IPEX revenue anticipated to start in the near term, we have been advised that the split was necessary to raise our stock price to attract investors and investment banks to support our company. Our reputation and ability to raise capital has been encumbered by a stock price in the low penny range, and we are hopeful that our revised business plan, when combined with a more palatable stock price, could serve to stimulate new capital markets interest in IPSI. Our goal is to utilize any revenue from IPEX, plus any new investment dollars, to complete our required IPEX capital contributions and further augment our balance sheet by retiring or allowing for the conversion of our outstanding convertible debt.
On behalf of all of us at IPSI, I wish to express my profound gratitude for your continued trust and support in IPSI. As we navigate this exciting next phase, we will continue our commitment to transparency, innovation, and value creation. You can expect regular updates as we make progress, and we are looking forward to sharing more news with you soon.
William D. Corbett
Chairman and CEO
Innovative Payment Solutions, Inc.”
About Innovative Payment Solutions, Inc.:
Innovative Payment Solutions, Inc. (OTCQB: IPSI) is a cutting-edge provider of digital payment and other solutions for both business owners and consumers. IPSI is a joint venture partner in IPSIPay Express, a new business aiming to provide a proprietary Instant-Settlement in RealTime™ merchant processing solution and traditional credit card processing to markets including online gaming and entertainment.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 made by Company management and the Company’s commercial collaborators. All statements other than statements of historical fact contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” or “will” or the or the negative of these terms or other comparable terminology. These forward-looking statements are based on expectations and assumptions as of the date of the press release and are subject to significant risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially and adversely from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others: (i) whether the IPSIPay Express joint venture partners can develop and commercially launch IPEX on the timeframes anticipated, if at all; (ii) challenges with the gaming, entertainment and other markets in which IPSIPay Express expects to operate; (iii) merchant and customer acceptance of IPSIPay Express as an alternative payment method; (iv) the ability of IPSIPay Express to generate revenue and distribute cash to the Company; (v) the anticipated impact of the Company’s September 2023 exit from its IPSIPay business; (vi) the Company’s ability to raise required new capital; (vii) the Company’s ability generate revenue, positive cash flow or profitability; and (vi) the other factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and the Company’s subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release. The Company undertakes no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.
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