Digital X a step closer to commercialising AirPocket

Fintech company Digital X has confirmed that it is a step closer in rolling out and commercialising AirPocket, the company's global remittance product.

Recently rebranded from Digital CC, Digital X announced as part of its September 2015 quarter update that it successfully completed two phases of internal testing of AirPocket with independent US security firm Security Innovation.

According to the firm, the testing demonstrated that AirPocket's infrastructure has the ability to handle loads of up to 12 transactions per second and over 1 million per day.

In addition, the company also secured money transmission services in the US through an agreement with US based payments company, CoinX. Digital X said the partnership is expected to help accelerate the development and commercialisation of AirPocket by up to two years, as the company will leverage CoinX's already established and licensed banking relationship in 40 US states.

As a result, the company was able to publicly launch the beta version of AirPocket on September 29, 2015.

"The completion of the security testing and security money transmitter licenses culminated in the public beta launch of AirPocket with remittance now being sent from the US to Dominican Republic via the application.

"The first phase of public beta is now complete and feedback from users was overwhelmingly positive," the company said.

The company said it plans to expand its second stage of beta testing to a larger number of users, up to 1,000, and is due to commence in November 2015. Testing will commence with iOS and will be expanded to Android.

AirPocket's full public launch is scheduled to commence in Q2 2016, the company said.

"Importantly, we have recently advanced negotiations for our first strategic AirPocket partner for the Latin American rollout and are looking forward to announcing this exciting development as soon as it has been completed," said Digital X executive chairman Zhenya Tsvetnenko.

In May, Digital X raised AU$3.5 million to fund the development and rollout of AirPocket, an app-based peer-to-peer, cross-currency cash remittance platform.

During the quarter, the company also reported that its Direct business achieved revenues of AU$5.3 million unaudited from Q3 2015, which was driven by adding low risk, high volume clients to the platform. The number of customers using Digital X also increased over 20 percent during the period against the previous quarter.

Looking ahead, the company said in the next quarter that Direct will be focused on further optimising its algorithmic hedging and market making operations, and will begin public promotion of its API for integrating the company's liquidity platform into third party applications.

Development is also underway to publishing public code repositories in various languages including python, Javascript, and C# for interacting with Digital X Direct API, the company said.

Digital X also reported it has had cash and bitcoin inventory of $3 million at September 30, 2015. This consisted of $2.3 million in cash and $0.7 million in bitcoin.

But the company will not be in the cryptocurrency business for much longer after announcing last week that it will be shifting its business model to focus on software development.

This comes after the former bitcoin miner defended cryptocurrency, despite reporting a net loss after tax of $6.77 million, and negative earnings before interest, tax, depreciation, and amortisation (EBITDA) of $3.16 million for the full year, ending June 2015. The company said at the time that its FY15 results reflected a "strong performance from the company's bitcoin operations", with bitcoin mining generating $6.4 million in revenue.

Similarly, in the first quarter of this financial year, the company reported its first loss, with a negative net operating cash flow of AU$261,000 for the three months ending September 2014. According to the company, despite the drop in value of bitcoin, the devaluation had not impacted its performance.

"Investors should of course remember that movement in the bitcoin price has little bearing on the technology and the digital currency revolution, of which we are a leading participant," Tsvetnenko said at the time.

"Short-term fluctuations do not affect our continued progress, and we are well funded to operate our business and work towards achieving our near-term goals around managing our mining capacity and launching our cutting-edge software products."