Omise is a unicorn, or pre-IPO company, that wants you to unplug from the banking system. The company’s goal is to get people to use its Ethereum-based system instead of banks.
Omise’s creators claim that its system will enable you to do everything you can do at a bank, without a bank account. That includes taking out loans, convert currencies, save money, transfer money, and send money to friends and family.
The basis of that system is an Ethereum-based, or ERC20, cryptocurrency called OMG. Omise was able to raise $16 million through an initial cryptocurrency offering (ICO) of offering in 2017, Bloomberg Technology reported. Accountholders would have the choice of using OMG, fiat currencies, or other cryptocurrencies in the Omise ecosystem.
OmiseGo is the creation of Omise, a venture-backed capital company operating in Thailand, Japan, Singapore, and Indonesia. Omise has attracted a lot of attention because it was named a “Fintech Rockstar” by Forbes Thailand. Omise is based in Bangkok but has plans to operate throughout Asia and beyond.
The word Omise means instore in Japanese. Omise was founded in 2013 and raised $17.5 million in venture capital in 2016. Omise’s backers include major venture capital firms including Japan’s SBI Investments, Sinar Mas Digital Ventures, Ascend Money, and Golden Gate Ventures according to Bloomberg Technology.
Banking without a Bank
The business plan at Omise is a very simple one to create a Payment Gateway that will offer access to a wide variety of financial services including peer-to-peer (P2P) payments, international remittances, bill payment, top-up of debit cards and accounts, and money transfers. All of those solutions would be available in the Omise ecosystem, which is accessed via the OmiseGo app.
Users will be able to earn loyalty and rewards points when they use Omise’s app, the points will earn Omise’s OMG cryptocurrency. Points can be converted into fiat currency or altcoins or used to make purchases. Long-term plans include adding banking services, such as business-to-business (B2B) payments, supply-chain solutions, lending, and savings deposits to Omise’s ecosystem.
The app will allow for cross wallets transfer, and enable people to make mobile payments. Those services indicate that the long-term goal at Omise might be to start a blockchain-based bank. Omise would need to get a banking license to offer such services in many countries – including the United States and Canada.
Omise looking to Cash in On Crypto-Debit and Crypto-Gift Cards
A major goal of Omise is to issue a crypto-debit card; described as a “cash card” at the company’s website, that converts OMG and other cryptocurrencies into fiat currencies such as dollars and Yen.
Presumably, this would be a Visa or MasterCard product that customers would use at brick and mortar stores, vending machines, and gas pumps. It might be possible to get cash from cash registers and ATMs with the OmiseGo crypto-debit card. Unfortunately, no examples of the OmiseGo crypto-card are available, nor is there any indication what credit-card brand it will bear.
An interesting product that Omise might offer would be a company crypto-debit card that can be loaded with OMG. That card could be issued to employees to use on company business or to pay business-travel and other expenses.
OmiseGo also has plans to issue gift cards that can be topped off with OMG and other cryptocurrencies. Such gift-cards would be a very popular product if they bore the Visa, MasterCard, or American Express brands. That would allow for their use at websites like Amazon and Walmart.com, and at brick and mortar stores, vending machines, or automatic teller machines (ATMs).
A website that sells crypto-gift cards might be a big moneymaker for Omise. Even greater profits can be made by selling crypto-gift cards through brick and mortar stores, or vending machines.
All of those solutions will operate through the Ethereum-blockchain and ecosystem. That would make OmiseGo highly compatible with a wide variety of Ethereum-based financial solutions, including TenX and Centra’s Ethereum-based digital wallets.
The OmiseGo Cryptocurrency
OMG trades on the wider cryptocurrency market but provides a medium of exchange for the Omise system.
People can use OMG as an investment, a cryptocurrency, or a means of getting rewards points in the Omise ecosystem. A good way to think of OMG is a cryptocurrency designed for use by both regular people and traders. One of the biggest advantages of OmiseGo is that it can be easily converted into the second most popular cryptocurrency; Ethereum.
Omise used an ICO because that enabled it to raise funds without selling equity. It was also able to avoid the stock market by issuing an ICO. Initial cryptocurrency offerings (ICOS) have become popular because they are cheaper and have fewer legal restraints than stock offerings.
Is OmiseGo a Good Investment?
OmiseGo’s performance has been better than that of other ICO-based cryptocurrencies.
OMG achieved a Coin Price of $15.42 (.0212 ETH), on December 25, 2017. That gave it Market Capitalization (Market Cap) of $1.573 billion (2.17-million ETH) on the same day, which is very big for an ICO token.
This indicates there is a lot of market-interest in OmiseGo, which provides lots of opportunities for speculators and traders to make money. That also makes OMG more unstable and subject to sudden price changes. Its value fell by 12.99% on December 25, 2017.
One cause of such volatility is OmiseGo’s Market Volume; which was $94.31 million (130,071 ETH) on December 25, 2017. That is high and it creates greater market volatility for OMG.
There are a couple of explanations for OmiseGo’s high Coin Price. The first is obviously is its connection to Ethereum which saw dramatic growth in price in late 2017. Ethereum’s Coin Price grew by 50.02% or $228.23 during the 30 days between November 24 and December 24, 2017.
The other is that OmiseGo is associated with an established business that has been around for four years, rather than a speculative startup. Omise’s ability to attract venture capital from major investors and attention from the mainstream media also boosts its Coin Price.
Is OmiseGo Vulnerable to Inflation?
Despite what some people think, all cryptocurrencies are subject to inflation. That is why some altcoins such as OmiseGo are designed to be more resistant to inflation.
OMG has a fairly-standard inflation-resistant feature in the form of a Total Supply. A Total Supply is an artificial limit on the number of altcoins that can ever be created. The hope is that such a limit, will keep the Coin Price high, and dampen the effects of inflation.
The Total Supply for OmiseGo is 140.246 million which might lead to a higher Coin Price in the long run. It should be noted that such a high Coin Price can only be achieved if there is a high demand for OMG if demand is low the Total Supply will not raise the Coin Price.
The OMG Coin Price is fairly high right now because it had a Circulating Supply of 102.043 million coins on December 25, 2017. That means there is a lot of OMG on the market which can lead to inflation. Inflation is based on the price rather than the supply of a cryptocurrency.
A potential cause of inflation for OmiseGo is the linkage to Ethereum. Ethereum has no Total Supply, so it would be possible mine unlimited amounts of it. Such out of control mining can occur because miners make their money by producing altcoins and selling them. That gives them a very strong incentive to mine as much ETH as possible.
A large supply of Ethereum might lead to inflation, which might reduce the price of Ethereum-based cryptocurrencies such as OMG. A large Market Volume of Ethereum might increase OMG’s use because it may encourage widespread use of ETH, which can increase the demand for Ethereum-based solutions like those marketed by Omise.
Omise Might have a Large Potential Market
The potential market for Omise’s products might be huge because lots of people are unhappy with banks, or not using them at all.
Only 23% or less than one fourth, of Americans were satisfied with their banks a 2015 survey of accountholders by FIS determined. Customers were dissatisfied with safety, transparency, fees, and the basic customer service offered by most financial institutions. Despite that banks in some other countries are doing well, Germans gave their banks a score of 83 out of 100, FIS told CNBC.
An even greater opportunity might be the unbanked and underbanked. Around 7% of American households containing 23.2 million people had no bank accounts in 2015, the Federal Deposit Insurance Corporation (FDIC) reported. Another 19.9% of the population or 24.5 million households containing 51.1 million adults were underserved by banks in 2015, the FDIC estimated.
If a product like OmiseGo can reach just 10% of America’s underbanked it would serve tens of millions of customers. The opportunities for Omise around the globe might be far greater.
P2P and Mobile-Pay might be a huge opportunity for Omise
The World Bank estimated that around 2.5 billion people worldwide lacked bank accounts in 2017. Yet many of those people had access to mobile payment solutions, which means they would be able to take advantage of a solution like OmiseGo.
Around 64 million people or 12% of the population in Sub-Saharan Africa reported having a mobile money account, the World Bank reported. Around 45% of those people admitted they had a mobile money account but no bank account. Such accounts can be very popular, around 65% of mobile account holders in developing countries said they used them at least three times a month.
Such mobile-money accounts can be very lucrative, more than $10 billion was processed through the M-Pesa peer-to-peer (P2P) app in Kenya between July and September of 2016, Mobile World Live reported. M-Pesa is very popular it had 20.7 million users in just country Kenya, in 2016. That is good news for OMG investors because OmiseGo includes a P2P app.
P2P apps are also gaining in population in developed nations as well. The volume of payments processed by PayPal’s Venmo P2P solution doubled between 2nd quarter 2016 and 2nd quarter 2017, Recode reported. Venmo processed $3.9 billion in transactions in 2nd quarter 2016 and $8 billion during the same period in 2017. Venmo’s payment volume might reach $40 billion in 2017, PayPal estimated.
Omise has a lot of Competition
The problem for Omise is that it has vast amounts of competition out there. In addition to established fiat-currency based solutions such as PayPal, M-Pesa, Alipay, WeChat, Tez, Android Pay, and Apple Pay, there are many companies offering cryptocurrency-based P2P and Fintech solutions.
TenX for example has a working crypto-debit card but lacks permission to issue a Visa card outside of Europe. TenX can be a major competitor to Omise because it has demonstrated a digital wallet and crypto-debit card that can convert several cryptocurrencies into fiat currencies.
Several companies including Shakepay, Uquid, and Centra are planning ecosystems similar to Omise’s. Centra Tech is a major threat to Omise because it is planning to offer banking services and crypto-debit cards in the United States. Unlike Omise Centra Tech is trying to get a license to operate in the USA.
Despite that, Centra’s cryptocurrency (CTR) was not worth as much as OMG. Centra had a Coin Price of $2.18 (0.003 ETH) and a Market Cap of 201,370 ETH ($148.190 million) on December 25, 2017.
Centra is a direct competitor to OmiseGo because its system is Ethereum-based and connected to the banking system. The CTR Token has attracted some investor interest it achieved a Market Volume of $24.516 million (33,811 ETH) on December 25, 2017.
A major setback for Omise would be Centra or TenX shipping crypto-debit cards first. TenX has tried to ship cards without success, and Centra is taking preorders for its cards. An even greater problem would be an alliance between Centra or TenX and a major bank such as JPMorgan Chase.
Meet some of Omise’s Competitors
There are some other serious competitors for OmiseGo out there. A company to watch is MicroMoney which claims to have made 40,000 blockchain-based loans to people in Myanmar (Burma), Cambodia, Thailand, Indonesia, and Sri Lanka. MicroMoney’s AMM token had a Coin Price of 45.9¢ (0.0006 ETH) and a Market Cap of $465,763 (645.88 ETH) on December 25, 2017.
Another threat is BitPesa which offers a cryptocurrency-based P2P app to business customers. BitPesa claims to have 6,000 customers in 85 countries.
A British company called Nebeus is trying to develop what it calls a “cryptobank.” Nebeus is a major threat because it already offers Bitcoin-backed loans and a P2P app online. Nebeus is planning an ICO of a token called NBTK in the near future. Nebeus claims to be offering a MasterCard; that can be loaded with the proceeds of its lending and NBTK.
All the competition proves that Omise’s business has a lot of growth potential. That and Omise’s proven ability to attract venture capital make OMG a cryptocurrency with a lot of growth potential. Investors that want to profit from the future of banking and financial technology should check out Omise and OMG today.