The US market affected a number of firms over the course of 2018. The financial market was affected both by macroeconomic turmoil, global trade wars as well as declining trends in certain industries, all which culminated in the general downward push.
This was no different for the fintech market segment and especially so for cryptocurrency operators. While 2017 had seen a boom in the segment, 2018 saw a significant decline in the value of portfolios which were heavily exposed to cryptocurrencies. With cryptocurrency movements seemingly pegged to Bitcoin, the volatility experienced with and consequent decline witnessed in Bitcoin’s price led to a massive loss in value for cryptocurrency investors.
The result was that firms like Digatrade Financial Corp (OTCMKTS:DIGAF) which were invested in the sector witnessed declined share price performance. Over the course of 2018, the firm’s share price declined steadily throughout the year, falling from $.25 per share to lows of below $.005 per share. Moreover, while there was some turbulence witnessed in the months of October and November which was coupled with a spike in the traded volumes, the share price kept oscillating around below the $.02 mark. This price movement can be seen in the chart below:
Over the past five days, there seemed to be a glimmer of hope as the price begun its climb, albeit slowly. The share turnover witnessed for this stock over the course of this week has been massive with over 8.2 million shares having moved in the last two days. Unlike this turnover, there was an uptick in price as it rose by $.0038 to close at a high of $.01 as at Friday 8th February. This didn’t last long as the price eventually declined and it currently stands at $.068 per share, a near 32% decline from its previous highs as shown below:
The above rise and reversion in share price led us to have a detailed look at the company and evaluate the news which drew investors to have a look at it. This piece provides a summary of our review.
Preliminary Look at DIGAF
Prior to going into the details, let us have a preliminary look at the firm’s history and investment focus, therefore at its growth trajectory.
Digatrade Financial Corp was founded back in 2000 and headquartered in Vancouver, Canada. It was previously known as Bit X, a name which changed to its current one back in 2015.
It operates as a Canadian digital asset exchange platform while offering solutions in blockchain development and distributed ledger services. Furthermore, their venture into the financial field has seen them provide real-time foreign exchange settlement and risk management services as well as debit card and cryptocurrency exchange solutions.
The most recent news affecting DIGAF has been on a new patent-pending product meant to combat credit card fraud which is under development by Securter Inc. DIGAF is expected to see it through the marketing and launch phase and this, according to the firm, will boost its top lines significantly as seen below:
Credit card fraud has been a serious challenge for companies in the United States. According to a report by Nilson, the credit card fraud in 2016 amounted to $24.71 billion while Barclays added onto this by reporting that at least 47% of this took place in the United States. One can, therefore, estimate that the United States suffered about $11.6 billion in credit card theft during the year and this has been increasing since.
While credit card companies continue to develop new ways of combating fraud, perpetrators keep coming up with new ways to carry out these acts. However, with the advancements in technology, new methods and technologies have been developed to combat credit card fraud. Different firms are now looking at new ways of implementing these technological advancements into their systems. One such firm is Securter Inc which has come up with an evolutionary platform meant to ensure this is achieved.
While it has been completed, the firm is currently working on a way of ensuring it gets to market and this is where Digatrade Financial Corp comes in.
Combating Credit Card Fraud
Securter Inc is a Canadian firm which boasts vast experience in developing proprietary payment-platform technology. Their most recent development is a platform which is meant to ensure that credit card payments are made more securely and that the privacy of the data input by the user is maintained. Through this platform, Securter expects to solve some of the problems which have been experienced in card payment platforms and especially for online card payments.
That said, the firm had been seeking a reputable financial institution which would ensure that they reach the market successfully. Thus, the tale of their partnership with DIGAF begun.
Through a letter of intent signed with the Canadian firm, Digatrade will be assisting in the launch and commercialization of the technology through one of its subsidiaries.
The platform will help to combat one of the largest forms of fraud in the United States: ‘cards not present’ fraud. Through it, users will receive both privacy and financial security so as to ensure that information relayed by the user, the gateway used to make the payment and the eventual payment itself are protected.
Under the terms of the agreement, DIGAF will create a subsidiary which will receive $3 million to fund its operations. This subsidiary will then carry out market research, marketing and consequently launch the product.
While this continues, it is clear to both firms that stakeholders in the industry are welcome to the idea of the product. According to DIGAF, preliminary market research shows that the market is conversant with the benefits which accrue from Securter’s new product. DIGAF’s primary goal at the moment is to conduct meetings with stakeholders and other players so as to fine-tune their expected campaign and consequent market entry.
The agreement will further see DIGAF receive their revenues based on the sales of Securter’s new product (the revenues received by DIGAF are pegged to the sales made by Securter). DIGAF is therefore keen on ensuring that the product comes to market with a bang and that they beat the set sales targets. Eventually, this will provide both revenues and profits of Securter and consequently for DIGAF.
DIGAF, through this partnership with Securter, is expected to launch the product to market. With the market seeming receptive to its idea, it comes as no surprise that investors in DIGAF are looking to cash in on the expected revenue boost. Going forward, therefore, it is expected that the market will be keenly assessing the patent process and whether Securter receives it. If received, the future of DIGAF will be all the much brighter.
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Disclosure: We have no position in DIGAF and have not been compensated for this article.