4 Stocks to Watch as Pandemic Boosts Contactless Payments

Demand for mobile contactless payments has been on the rise for some time now, which further got a boost following the coronavirus outbreak. Social distancing to avoid contracting the deadly coronavirus has seen an increasing number of people opting for newer modes of transaction.

This has seen contactless payment gain popularity in the past few months. And the trend is likely to stay given the convenience and safety it assures. According to data published by the online trading portal Comprar Acciones, the total transaction value via contactless payment modes is estimated to exceed nearly $500 million by the end of this year.

Contactless Payment Gains Traction

According to the new report by Comprar Acciones, contactless payments gained popularity globally as the pandemic raised fears in the minds of people and they maintained social distance to avoid getting contracted by the virus. Data released by Comprar Acciones shows that total transaction value via contactless payment reached $2.1 trillion globally in 2020.

This was a big jump given that before the pandemic people seldom used contactless payment despite being aware of it. According to a report published in Techwire Asia, the World Bank Group assessed that due to growth of the contactless payment technology there has been a substantial rise in the use of debit even for small-value payments.

Touchfree Payment Poised to Grow

According to Comprar Acciones, the mobile contactless payments market is estimated to reach $2.49 trillion by 2021, growing 24% year over year. This translates into growth of 107% in just two years.

According to Statista, the global contactless payments market was valued at $755.6 billion in 2018. Although the pandemic helped boost the market, it had already got a push before its outbreak in 2019, when it grew 90% and was valued at $1.19 trillion.

The market is expected to grow by 40% between 2021 and 2023, reaching $3.526 trillion.

Going by users, the average transaction value per user is projected to grow 25% between 2019 and 2021 and reach $1,670.By 2023, it is expected to jump 22% and reach $2,051.

The surge in users of contactless cards and other touch-free options has been working miracles for companies offering these services. Coronavirus fears have not only compelled people to use contactless payment but also have changed their behavioral patterns, as many now want to continue with this mode.

Stocks to Watch

Apple, Inc.’s AAPL Apple Pay is a mobile contact payment system and digital wallet service that Apple Inc. introduced in 2014. The service allows users to pay for products and services using near field communication (NFC) at the point of sale, whether in person, via iOS apps or the Internet.

The company’s expected earnings growth rate for the current year is 55.5%. The Zacks Consensus Estimate for current-year earnings has improved 13.6% over the past 60 days. The company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PayPal Holdings, Inc. PYPL has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and a two-sided platform that enables it to offer a smooth and secure transaction facility to both customers and merchants.

The company’s expected earnings growth rate for the current year is 21.4%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days. The company has a Zacks Rank #3 (Hold).

Visa, Inc.V operates a retail electronic payments network worldwide. The company provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform.

The company’s expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. Visa carries a Zacks Rank #3.

Global Payments Inc. GPN was incorporated in Georgia as Global Payments Inc. in 2000 and spunoff from its former parent company in 2001. Including its time as part of its former parent company, it has been in the payment technology services business since 1967.

The company’s expected earnings growth rate for the current year is 25%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. Global Payments carries a Zacks Rank #3.

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Apple Inc. (AAPL): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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