The past few months have changed the way businesses and transactions are done. An increasing number of Americans are relying on technology which has seen things like e-commerce and contactless transaction gain prominence.
The coronavirus has definitely played a major role in changing the perception of people. The contactless payment mode which wasn’t too popular has fast become the preferred choice among all age groups. And the trend is likely to stay given that people are finding this mode of payment more convenient.
Contactless Payments Gaining Popularity
Contactless payment options have been there for more than two decades now. However, today its importance is being felt like never before thanks to the pandemic that has compelled people to chose this mode of payment over others on safety concerns. Consumers not only want the ability to shop at their convenience but also want to minimize personal contact with point-of-sale devices. Contactless cards are rising in popularity as a result.
According to a Pew Research Center study published in CNBC, nearly one third of the adults say that they make almost no cash purchases during a week but go for contactless payments. Millennials are the ones who are more comfortable using contactless payments.
The report further says that nearly 34% of adults below the age of 50 don’t make any purchase in a week using cash. Over the years, cash purchases have witnessed a decline and the pandemic has further given a boost to touch-free payment.
Contactless Payment Here to Stay
The sudden surge in contactless payment this year, especially since the coronavirus outbreak, has been working miracles for companies offering these services. The coronavirus fears have compelled people to use contactless payment and changed their behavioral pattern, as many now want to continue with this mode.
However, the country is still a laggard in terms of contactless preference, with only 24% indicating it as their preferred method of payment, according to a report by global data and insights firm Dynata. That may, however, change fast as businesses have started preferring contactless transactions keeping in mind the safety reasons.
Stocks to Watch
PayPal Holdings, Inc. PYPL has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants.
The company’s expected earnings growth rate for the current year is 22.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the past 60 days. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Global Payments Inc. GPN was incorporated in Georgia as Global Payments Inc. in 2000 and spun-off 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 next year is 3.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. The company has a Zacks Rank #3.
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 22.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. Apple carries a Zacks Rank #3.
Alphabet, Inc. GOOGL, apart from other products and services, also 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 next year is 4.8%. The Zacks Consensus Estimate for current-year earnings has improved 14.9% over the past 60 days. The company has a Zacks Rank #3.
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