Pandemic COVID-19 accelerated global transition to electronic types of payments and various digital payments. Unlike the banks, going through a very difficult period due to low interest rates and other unfavorable conditions, the global payment system is gaining momentum.
Pandemic COVID-19 has forced many investors to look more closely at companies involved in digital payments. With more rapid and extensive transition of consumers around the world to cashless, payment, online shopping and online translations, their importance has grown as it rose to their growth prospects.
The top three companies in the list of winners of the industry of digital payments is: Holdings of PayPal (PYPL), Visa Inc. (V), Mastercard Inc. (MA), their shares in the last quarter increased by 73.5%, 15.6% and 15.7%.
PayPal, one of the companies-pioneers in the industry of digital payments continues to hold the lead and ahead of his time.
Digital payment products allow customers to easily send and receive payments to businesses and friends and family through its subsidiaries such as Venmo. The company earns money by charging a Commission for individual transactions.
With low prices on March 23, the stock rose more than 97%. Although profits in the first quarter of the year decreased significantly, the company has added over 20 million new accounts and increased the total amount of payments is 18% per year. According to the latest data, the payment platform PayPal has over 300 million users.
“I would say that April was probably the strongest month for PayPal since we became a public company,” – said in an interview with MarketWatch, President and CEO of PayPal, Dan Schulman.
In the media there are rumors that PayPal and Venmo can begin to offer the sale of different cryptocurrencies directly through their platforms.
Among 30 analysts on wall street 23 PayPal give the stock a rating of a “buy”, 7 “hold”, indicating that the overall rating of “strong buy”. However, the average target price of $160,85 against the price of $168,35 at the close of trading on Monday indicates that they may be overpriced and its potential reduction by 5%.
Visa and Mastercard
The name of these two payment systems, all customers could see on their maps, but these companies are not related to lending and therefore do not depend on the current situation with the pandemic, which hit banks.
Visa and Mastercard as a payment system, help in the conduct of electronic payments between consumers, banks, businesses, governments and other organizations. For this they charge fees – this is, basically, a certain percentage from the amount of the transaction, so the company can influence lower payment amounts.
Visa and Mastercard compete with each other. Realizing the growing trend of digital transformation of the payments companies are striving to occupy a larger market share and get the most advanced technology, tools and the best partners.
Among the latest steps – the acquisition of Mastercard public company Finicity banking and shopping for the next FINTECH startup Visa Currencycloud and company Plaid, platform that allows users to connect their Bank accounts to the apps.
Average rating of wall Street in relation to the shares of Visa and Mastercard is “purchase”. The average target price of Visa shares is $207,12 says about the potential growth of 8.2% compared to the closing price Monday of $191,38. The average target stock price of Mastercard is $326,85 that says about the potential growth of 11.58% from the closing price Monday of $292,93.
Recent research shows great prospects for all three companies. According to the research firm, in may this year, the global spending of consumers on e-Commerce grew by 93% compared to may 2019.
Product Manager Visa Jack Forestell recently noted that in March, 13 million Visa cardholders in Latin America made his first transaction in e-Commerce.