OK, OK, the questions on this one are getting a bit overwhelming — and I’m afraid that if I don’t cover this one soon the villagers will soon be gathering their fiery torches and marching on Castle Gumshoe … so here goes.
Louis Basenese and the folks at Wall Street Daily are pitching his MicroCap Tech Trader by promising huge returns for a small company that he thinks holds the key to secure NFC transactions — and which will generate big licensing revenues as their key patents are put into use by Google and Apple, among others.
So what’s he talking about? Well, much of the ad is about the risks and promise of near field communications (NFC) — this is a wireless protocol, kind of like bluetooth but shorter range, that allows two devices that are typically within a few inches of each other to communicate. In practice, the consumer-facing applications are mostly smart cards (like you might use for your local transit system), contactless payment cards or keyfobs (like that little ExxonMobil keychain you can wave in front of the pump to pay for your gas), or, in the next wave of this development, NFC chips in cell phones that let you use your phone as a “digital wallet.”
In all cases, NFC security is an issue — that’s because you don’t have to hold the card or phone to connect with the NFC chip, it’s wireless and someone with a transmitter might be able to snoop on your wireless transactions or even ping your card, chip or phone to try to “hack” it to get the pertinent numbers and ID info. That’s why you see them marketing NFC-blocking wallets with layers of aluminum (or whatever) to prevent snoopers from sniffing out any cards you’re carrying, and that’s why, to at least some extent, NFC and the “mobile wallet” cell phone that you use to pay for everything haven’t really taken off yet — though both are more prevalent in some Asian and European countries than they are here.
That’s not the only thing slowing the adoption of the chip-based “cell phone as wallet,” of course — there are plenty of security concerns, but there’s also the lack of clear standards, competition among providers and payment processors and lack of easy interoperability, the rising capabilities of app-based or other non-chip payment solutions (you can pay via PayPal or your smart phone at Home Depot or Starbucks, for example, and those don’t use NFC chips).
And there’s also the simple fact that consumer acceptance of new trends is often very slow — particularly for financial products. People are comfortable with credit cards, for the most part, and NFC isn’t that much faster or easier — but debit card use only exceeded check use a few years ago, and though check use is still falling sharply there are still billions of checks processed every year by the Federal Reserve. The impatient foot tapping you do when the person in front of you in the express line at the grocery store when tries to buy two cans of tuna and pay with a check may not be necessary soon, but it doesn’t mean that person will be paying with their cell phone next year.
There are also, as you might expect, roughly a gazillion companies trying to get their foot in the door in NFC payments, whether they’re card or reader makers, software or security companies, chipmakers or payment processors or phone builders … everyone wants to have a piece if this turns into something big. And big is expected, though soothsaying the speed of acceptance is not easy — early adopters and futurists have been predicting the mass consumer rollout of the “mobile wallet” and cell phone payments for more than a decade now, the technology to use a chip in your phone to make a payment has been around for longer than “smart phones” (contactless chip-enabled payments by mobile phone were launched commercially in Japan and South Korea a decade ago — not without challenges, but they’re pretty established at point of sale terminals and in vending machines thanks to that head start at working through the challenges and the tech early adopter culture in those countries).
So that’s the backdrop, as best as I can share with you in a few moments — what, then, is the specific little company that Louis Basenese is teasing as a key player, a company that he thinks will have licensing deals, key announcements by August 14, and good exposure on Apple and Android devices very soon?
Well, for that we’ll need some clues. Unless, that is, you’d like to pop over and subscribe for $3,500?
Oh, wait, this is also one of those “we’re going to write you a check” teasers — so it’s not $3,500, it’s $3,500 minus the check for $2,650 they send you … so the newsletter is actually going for $850 these days.
But regardless of whether or not you want to pony up that kind of cash for a breakthrough-tech newsletter, I’m guessing you’d like to know the name of the stock first, right? Take away that crazy “tell me the secret now!” impulse, and make a sober decision about subscribing after a good night’s sleep? Sure, we can do that — I’m certain I won’t cover the stock as thoroughly as Basenese, and I won’t tell you whether or not to buy it, but I’m pretty sure we can identify it for you. And the price? Much more free-ish (though of course, we always delight in welcoming new members to the Irregulars, our $49 a year premium membership group — just to entice you further, those folks would have already seen the answer to this teaser and a nice quick summary in the beige box on the left).
So what are our clues from Mr. Basenese and the MicroCap Tech Trader?
Well, they’re frankly a bit thin — so we might not reach 100% certainty in our match today — but this is what we get:
“… for the better part of a decade now, the world’s corporate giants have been building the infrastructure for ‘mobile wallets’ and wireless payments to become the industry standard.
“Their logic is pretty straightforward…
“Easier ways to pay for products and services will mean more sales. A lot more sales!
“The technology powering everything is called near-field communications. Or ‘NFC,’ for short, which allows for easy, convenient payments at stores around the world.
“The heavyweights are pushing all their chips in on NFC.
“In fact, credit card giant, Visa, has predicted that people born over the past five years will never own a physical wallet.”
So the argument, basically, is that there is such a massive, global, corporate push for NFC payments that they will overcome the security concerns — and at least in part, they’ll do so using the technology of this company that he’s teasing. Or, as he puts it more floridly:
“Armed with only a smartphone, crooks can steal a mountain of credit card numbers with little more than the touch of a finger.
“More credit cards just got stolen this very second.Are you getting our free Daily Update
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“Beep. Beep. Beep.
“And the giant corporations are powerless to stop it from happening.
“They haven’t been able to develop the software smart enough to stump the crooks.
“They’ve tried everything, too!
“Enter one tiny company trading for less than two bucks.
“A company that holds every conceivable patent needed to stop these thieves dead in their tracks.
“By extension, this tiny company is also the gatekeepers to the entire trillion-dollar M-Commerce market.
“I expect The Bigs to secure this brilliant anti-theft technology for themselves any minute.”
So … any more specific clues hiding in all this puffery? Here’s what I found to feed into the Thinkolator for you:
“This time, the announcement concerns a company trading for less than $2/share….
“I’ve been tracking this company’s innovation from the very point of inception.
“I’ll see it through to its completion, too, which could happen as early as August 14, 2013….
“… this less than $2-a-share, San Diego outfit already has all the necessary patents in place…
“The biggest companies in the world MUST deal with it.
“These patents can secure their transactions, and get their $1 trillion juggernaut rolling….
” I’ll rush you that certified check for $2,650….
“You can do as you please with the money….
“… you’ll want to use the cash to purchase shares of this tiny company.
“At current prices, that’s about 1,800 shares. [note: that would be a price around $1.50]”
So that gets us partway there. A little more?
“one single investor (the man I told you about earlier) has already snatched up an amazing 38% of the compan