4 Stocks to Watch as Pandemic Boosts Mobile Payments

The coronavirus pandemic has been working miracles for some industries, especially the tech sector. In fact, the pandemic has changed a lot of things, including the way businesses and transactions were traditionally done. This has seen an increasing number of retailers and customers shifting to contactless payment. Social distancing to avoid fears of contracting the virus has seen people giving up cash transactions for contactless payment services.

This led to a contactless mobile payment boom in 2020 and the trend is likely to stay given that many have finally started to find this mode of transaction more comfortable.

Contactless Payment Gaining Popularity

According to a new report from research firm eMarketer, the United States saw in-store mobile payments usage increasing 23%. The pandemic compelled people to use credit cards and other touch-free payment methods.

In 2020, 92.3 million consumers above the age of 14 made transactions through proximity-based mobile payments. Although consumers from all age groups have been using mobile payments during the pandemic, the adoption rate was the highest among young customers including Gen Z and millennials.

The United States is now the second-largest market for mobile payments, with more than $465.1 billion worth of transactions being made in 2020 alone.

Mobile Payments Poised to Grow

Consumers in the United States have been slow in shifting to contactless payment modes but things are finally changing. According to eMarketer, 101.2 million consumers above the age of 14 are expected to shift to mobile payment options, surpassing half of the total smartphone users in the country by 2025.

Moreover, young consumers are projected to account for over 4 million of the total 6.5 million new mobile wallet users every year between 2021 and 2025. According to finance and investment company Finaria, the mobile wallet industry is expected to grow 24% and reach $2.4 trillion in 2021.

The surge in users of contactless cards and other touch-free options have been working miracles for companies offering these services. Besides, coronavirus fears are far from over and people will continue to prefer using contactless payment modes.

Stocks to Watch

Apple, Inc.’s AAPL Apple Pay is a mobile contact payment system and digital wallet service introduced in 2014. The service allows users to pay for products and services using near-field communication 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 36.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alphabet (NASDAQ:GOOGL), Inc. GOOGL, apart from other products and services, offers Google Pay, a digital wallet platform and online payment system developed to power in-app and tap-to-pay purchases on mobile devices, enabling users to make payments with Android phones, tablets or watches.

The company’s expected earnings growth rate for the current year is 18.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. Alphabet carries a Zacks Rank #2 (Buy).

Repay Holdings (NASDAQ:RPAY) Corporation RPAY provides payment processing solutions. The company's proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants.

The company’s expected earnings growth rate for the current year is 20.9%. The Zacks Consensus Estimate for current-year earnings has improved 11.7% over the past 60 days. Repay Holdings carries a Zacks Rank #2.

Square, Inc. SQ offers financial and marketing services through its comprehensive commerce ecosystem that helps sellers to start, run and grow their businesses.

The company’s expected earnings growth rate for the current year is 39.3%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. Square carries a Zacks Rank #3.

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