Tuesday - 20 August 2019



5 Stocks to Gain From Rising Use of Mobile Payments

5 Stocks to Gain From Rising Use of Mobile Payments
Mobile payments have revolutionized the way we spend, helping make contactless payment through a smartphone. Needless to say, consumers nowadays are more willing than ever to use mobile devices to split a bill, pay back a friend or pay a babysitter.

FABANEWS: So, how does mobile payment work? At a point-of-sale, especially at a supermarket checkout counter, smartphones use near field communication system to make payments without a debit/credit card. During purchases, the mobile device sends the consumer’s payment details through the Internet to the merchant’s website or app, thus, making payments less complex.

With the trend catching up, the mobile payment market is widely expected to touch $4.5 trillion in 2023. Thus, it will be wise to take a look at the top companies gaining from it.

Square Can’t be Ignored

Square, Inc. SQ is famous for its platform that helps companies set up point of sale terminals and mobile payment card readers. Majority of its revenues come from the fees collected whenever a person makes a purchase through its platform. The company is also looking to expand its Square Cash app, which helps users send money. This popular app is currently posing stiff competition to rival PayPal Holdings, Inc.’s PYPL person-to-person payment app, Venmo.

With around $23 billion market cap, Square is improving steadily with its gross payment volume jumping 29% in its recently-reported quarter. The company’s overall sales have soared 51% so far this year, which is why its shares are up more than 30% on a year-to-date basis.

Square currently flaunts a Zacks Rank #2 (Buy). In the past 60 days, two earnings estimates have moved north, while one moved south for the current year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The company’s expected earnings growth rate for the current and next quarters are a solid 62.5% and 83.3%, respectively. In fact, the company’s projected earnings growth for the current year is 70.4%, way higher than the Internet - Software industry’s expected gain of 11.8%. The stock possesses a Growth Score of A.

Alipay’s 1 Billion Users

Investors should keep in mind that Alibaba Group Holding Limited BABA is a dominant tech player in the Chinese market. But the e-commerce company is fast becoming a major player in the mobile payment market space.

Its mobile payment app, Alipay currently has a whopping 1 billion users and is used in 110 countries. China, in particular, has the world’s largest mobile payment market and Alipay processes more than half of the countries mobile transactions.

Alibaba’s growing mobile payment market helped the e-commerce giant’s overall sales surge 41% to $17.1 billion in the third quarter on a year-over-year basis, and earnings 15%.

Alibaba currently has a Zacks Rank #3 (Hold). In the past 60 days, eight earnings estimates have moved up, while none moved down for the next year. The Zacks Consensus Estimate for earnings has risen 3.8% in the same period.



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