MIAMI, FL--(Marketwired - Jan 25, 2017) - Net Element, Inc. (NASDAQ: NETE) ("Net Element" or the "Company"), a provider of global mobile payment technology solutions and value-added transactional services, today released the following letter to shareholders from the Company's chief executive officer, Oleg Firer:
Dear Fellow Shareholders,
As we begin the New Year, I would like to take this opportunity to recap our achievements for 2016 and lay out several exciting objectives for 2017.
I am pleased to say that despite economic challenges and changing our business model, 2016 was a successful year for Net Element. Our achievements provided growth, and positioned us for continued success as we continue to expand our global transaction services in the United States and select international markets.
2016 marked a year of significant progress and corporate achievements. We executed several complex initiatives and continue to make great strides in delivering on the strategic endeavors that we have been working on for the past three years. While a few of these endeavors are still in progress, our overall operations, competitive posture, and growth are much stronger today than they were one year ago.
- Total transactions processed during 2016 were 187 million compared to 161 million for 2015.
- Total transaction dollars processed during 2016 was $2.1 billion.
- Total transaction dollars processed geographically in North American and international markets in 2016 were $1.6 billion and $448 million, respectively.
- Growth across all categories was organic.
Key to Net Element's success is its dedicated management team and talented technology development, support staff and sales teams -- which have all contributed to Net Element's ability to achieve its goals for 2016. Our common objective is to enable the Company reach the goals we have outlined for 2017 and future years.
Net Element Business Model
In 2013 we defined our business model, prioritized our opportunities and objectives, and established the infrastructure necessary to achieve our goals. We focused on several primary business goals.
One of our first objectives was to deliver our expertise in transactional services in North America to select international markets across multiple channels, touchpoints and payment methods.
Our long-term objective was to create single, international on-boarding and transaction processing platform to power global commerce. With the introduction of our proprietary carrier billing platform, "Trinity Platform," in July 2014, paired with our acquisition of proprietary online and mobile payments transaction processing platform, PayOnline in May 2015, Net Element has been on track to achieve its long-term objectives and become a fast-growing provider of transactional services in select international markets. Our capabilities resulted in total processing volume for 2016 of $2.1 billion, a 245% increase since 2013, while transactions processed for 2016 reached 187 million, a 2,661% increase since 2013. Our platform is now available in over 50 countries, supporting more than 100 payment methods internationally.
Significant Achievements in 2016
- Net Element was named one of the fastest-growing technology companies in South Florida Business Journal's 2016 Technology Awards.
- PayOnline was named the best payment processing gateway in 2016 by Tagline.
- PayOnline was also recognized for its payment acceptance services by Markswebb Rank & Report, ranked as a Top 5 payment acceptance company.
Board of Director Changes
- Appointed Howard Ash, an international business development professional, to our Board of Directors and as chairman of the Audit Committee.
- Esquire Bank - this multi-year contract includes transaction clearing services, sponsorship for payment networks, bank identification number and merchant marketing agreement.
- Mashreqbank in United Arab Emirates - this new partnership expands Net Element's processing capabilities in the region.
- Round Bank in Russia - under this collaboration agreement, we integrated the first 70 online merchants to the PayOnline platform.
- AGBank in Azerbaijan - a new agreement with AGBank, one of Azerbaijan's leading banks, allows PayOnline to process online transactions in the growing market of Southwestern Asia.
New Key Client Relationships
- Dunkin' Donuts became a client in Russia; PayOnline enabled online ordering and payments for one of the world's largest coffee and baked goods chains.
- ExLine became a client in Kazakhstan; PayOnline enabled secure online payments for Kazakhstan's market-leading courier service.
- Digital Provider enabled mobile payments at Vnukovo Airport; our proprietary mobile transaction processing engine was integrated into airports infrastructure to power essential components of mobile ecosystem.
- VTB Insurance a leading insurance company in Russia became a client. PayOnline enabled a first-of-its-kind payment service for insurance premiums for VTB Insurance.
- Continued expansion in the Central Asian market.
- Launched payment processing and mobile payments in Azerbaijan.
- Signed leading online travel agency and national TV network as clients.
- In 2016 we were successful in raising capital utilizing debt exchange and equity financing instruments.
- Launched payment acceptance module for popular instant messenger application Telegram
- Launched proprietary gift card software application for Smart Payment Terminals
- PayOnline payments module became available for popular e-commerce and CMS platforms
- PayOnline introduced a new payment interface. New multi-channel payment interface is based on the user experience of more than 10 million online shoppers
- Unified Payments launched Mobile Point of Sale for iOS. Merchants can interact and transact with customers anywhere with our robust mobile processing and analytical tools
- Launched fully integrated omni-channel gift and loyalty platform
- Launched Aptito in Russia, aiming to lead in the underserved POS software market
- Released Aptito Point-of-Sale solution for retail stores, which helps improve the experience retailers provide in-store through enhancing add-on services such as inventory management and analytical tools
- Launched SalesCentral On-the-Go to expedite merchant approval and boarding
Outlook for 2017
We had a strong start in 2017 with implementation of payment acceptance services for ReservHotel, a leading travel distribution and booking provider serving over 500,000 travel agencies around the world, as well as for Sutochno.ru, the leading short-term accommodation rental service in Russia with over 700,000 online booking requests annually.
For the remainder of the year, we will continue to focus on strategic partnerships and innovative products that will further expand our services, positioning Net Element as a convenient one-stop solution for payments services to a global merchant community. We also intend to expand our presence in North America through distribution and integrated-services programs. In addition, we intend to further consolidate and centralize our operational infrastructure and resources.
We are very pleased with the progress that Net Element made during 2016, and look forward to further significant accomplishments in 2017.
Most importantly, we remain focused on the execution of our long-term objective to create a single, international on-boarding and transaction processing platform across payments ecosystems.
I would like to thank all of the shareholders for their continued support, especially given the volatility of the trading price of our stock during 2016. We anticipate that our improving financial results, continued expansion, strong partnerships and executing on growth endeavors will produce improved shareholder value in 2017.
We will continue communicating our developments to the investment community, and encourage shareholders and potential investors to visit our website and follow our social media channels, such as Facebook (https://www.Facebook.com/NetElement) and Twitter (https://Twitter.com/NeteInc), to stay informed and fully aware of new developments as they occur.
Thank you for your support and for taking the time to review this update letter. On behalf of all of us at Net Element, we wish each and everyone of you a healthy and prosperous 2017.
Chief Executive Officer
Net Element, Inc.
About Net Element
Net Element, Inc. (NASDAQ: NETE) operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise ("SME") in the US and selected emerging markets. In the US it aims to grow transactional revenue by innovating SME productivity services such as its cloud based, restaurant point-of-sale solution Aptito. Internationally, Net Element's strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions such as UAE, Kazakhstan, Kyrgyzstan and Azerbaijan where initiatives have been recently launched. Further information is available at www.netelement.com.
Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Net Element and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to whether the Company will be successful in expansion and growth endeavors and in entering into new partnerships; and even if it is successful in any or all of these endeavors, whether this will positively impact the Company or result in improved shareholder value. Additional examples of such risks and uncertainties are : (i) Net Element's ability (or inability) to obtain additional financing in sufficient amounts or on acceptable terms when needed; (ii) Net Element's ability to maintain existing, and secure additional, contracts with users of its payment processing services; (iii) Net Element's ability to successfully expand in existing markets and enter new markets; (iv) Net Element's ability to successfully manage and integrate any acquisitions of businesses, solutions or technologies; (v) unanticipated operating costs, transaction costs and actual or contingent liabilities; (vi) the ability to attract and retain qualified employees and key personnel; (vii) adverse effects of increased competition on Net Element's business; (viii) changes in government licensing and regulation that may adversely affect Net Element's business; (ix) the risk that changes in consumer behavior could adversely affect Net Element's business; (x) Net Element's ability to protect its intellectual property; (xi) local, industry and general business and economic conditions; (xii) adverse effects of potentially deteriorating U.S.-Russia relations, including, without limitation, over a conflict related to Ukraine, including a risk of further U.S. government sanctions or other legal restrictions on U.S. businesses doing business in Russia. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed by Net Element with the Securities and Exchange Commission. Net Element anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Net Element assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.