The Innovation Epicenter Advancing the Era of Digital Transactability By Investing.com Studios

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Moving the idea of money into the 21st century is a feat that’s being accomplished in many ways by the market’s most capable financial and payments companies. Thanks their convenient and value-added payment products, customers are getting used the idea that cash is a familiar yet often unnecessary accessory. As firms experience greater customer loyalty, lower overheads, and other benefits accrued from the mobile payment methods their customers demand, the proliferation of mobile payments has also spurred new investment opportunities for savvy market participants.

Payments Push into the 21st Century 

Early leaders in the payments arrived in the form of credit cards, and providers including Visa (NYSE:V) are still pushing the sector towards safer, easier payment methods. As magnetic strips have given way to chip readers and mobile Point of Sale systems, even the idea of swiping a card at the register has moved from the physical to the digital realm. Advances in smartphones and their nearly ubiquitous presence saw Mastercard (NYSE:MA), Visa, and other issuers develop applications to take advantage of NFC (near field communication). The result? Providers can process transactions wirelessly via the phone’s smart wallet and the merchant’s software.

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Credit card companies and other fintech innovators are making easier to pay in person and online as well, thanks to integration with eCommerce click-to-pay checkout systems. As the concept of money becomes increasingly digital, more data also opens up opportunities for sophisticated rewards and loyalty programs, which increase customer satisfaction and accelerate growth for mobile payment providers. The sector globally has expanded astoundingly fast, at a compound annual growth rate of 33.8%, and ’s anticipated to be worth $4.3 trillion by 2023. That’s no surprise considering that as of 2017, nearly 40% of polled internet users worldwide reported that they prefer mobile payments.

Explore the innovations and opportunities driving eToro’s MobilePayments thematic portfolio.

 

Discover Mobile Payments’ Immense Possibilities Read More

New Entrants Disrupt a Dormant Space

While Visa (NYSE:V), Mastercard (NYSE:MA), American Express (NYSE:AXP), and Discover have integrated their processing services into new hardware and software, open finance and APIs have also made room for tech-savvy companies to enter the space. Investors recognizing our increasing reliance on new mobile payments technologies would have achieved impressive returns on shares of Mastercard and Visa, but also later disruptors such as PayPal and Square (NYSE:SQ). Since 2008, one share of Visa (V) has increased from $12.00 to $179.42 (as of July 17, 2019) while over the same timeframe, Mastercard rose from around $20.00 to $279.50.

 

                                                            Visa (NYSE:V) versus Mastercard (NYSE:MA) Historical Returns 19/03/2008-17/07/2019

                                                                                                    *Past returns are not indicative of future price behavior

Those who had ignored cutting-edge contenders such as Square (NYSE:SQ), which integrates proprietary payments software and hardware solutions for merchants, would have missed out on returns topping 500% as SQ climbed from $ 11.20 in 2015 to current around $80.00 per share between 2015 and 2019. In Europe especially, companies like Square and Wirecard have also benefitted enormously from new regulations such as the Payment Services Directive (PSD2), which instituted new laws making it easier for big data innovators to access data and deliver customized financial services.

A Portfolio With Mobile Payments Isn’t Enough

While the retail and consumer finance sectors have benefitted greatly from the shrinking use of paper money, investors must have kept an ear to the ground in order to allocate their capital appropriately in this budding space. The mobile payments industry is constantly shifting, and different trends encapsulate different parts of the world. In China alone, hundreds of millions of people already rely on mobile payment solutions, while the West is slowly catching up.

Additionally, a battle for dominance is being waged between finance companies and tech companies. Both are necessary for the future of payments but would readily cut the other out from the picture if it was possible to take a larger slice of the pie. An investor taking a decidedly diversified approach should therefore consider allocating capital to instruments such as the eToro MobilePayment thematic portfolio. This CopyPortfolio incorporates a balanced allocation between traditional credit card issuers such as American Express (NYSE:AXP), Mastercard (NYSE:MA), and Visa (NYSE:V), but also digital providers like PayPal, Square, Wirecard, Fiserv (NASDAQ:FISV), and more.

The CopyPortfolio is not limited to these companies. MobilePayments is periodically audited and rebalanced by an expert in the payments space, who is responsible for identifying new portfolio components based on their position on the growth curve, global expansion, R&D opportunities, and financial health. The new world of money has already demonstrated immense potential, and the best way to realize it is through diversification—positioning the eToro MobilePayments CopyPortfolio as a balanced, but comprehensive tool.

Explore the innovations and opportunities driving eToro’s MobilePayments thematic portfolio.

Discover Mobile Payments’ Immense Possibilities Read More

Source: Investing.com

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