Forget Mastercard, Buy These 3 Digital Payments Stocks Instead

While the COVID-19 pandemic significantly affected multiple sectors, it acted as a tailwind for companies in the digital payment space. Digital payments were already growing before the coronavirus pandemic, but stay-at-home orders and the push for social distancing have accelerated this trend. Mastercard Incorporated (MA), one of the largest global technology-based payment companies, has benefited from the growing adoption of remote transactions…

Consequently, MA’s shares have gained 10% so far this year. However, there seems to be a disconnect between MA’s share price and financial reality, and the stock is losing its short-term appeal.

MA’s financials have suffered due to the staggered global shutdowns and travel bans this year. Net revenue in the last reported third quarter decreased 14% year-over-year to $3.8 billion, primarily due to a 36% decline in cross-border volume. EPS for the quarter came in $1.51, declining 27% year-over-year. Furthermore, analysts expect MA’s current year revenue and EPS to fall 9.8% and 18.1%, respectively.

Though the nation is celebrating the roll-out of COVID-19 vaccines, new travel restrictions are being imposed globally, thanks to the recently discovered new strain of the virus in the UK. Hence, it is wise to shift the spotlight off MA and focus on shares of digital payment companies like Visa Inc. (V – Get Rating), PayPal Holdings, Inc. (PYPL – Get Rating) and Square, Inc. (SQ – Get Rating) that may continue to soar based on their growing market share.

Visa Inc. (V – Get Rating)

V is a global payments technology company enabling people to use digital currency. The company facilitates commerce through the transfer of value and information. It operates VisaNet, a processing network that enables settlement of payment transactions. In addition, the company offers card products, as well as value-added services.

V announced a strategic partnership with Conferma Pay, a virtual payments technology provider, last month to launch Visa Commercial Pay, a suite of B2B payment solutions, to help improve cash flow for businesses and eliminate outdated manual processes. The company also acquired…

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