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5 Financial Transaction Stocks to Watch Amid a Booming Digital Era
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The Financial Transaction Services industry is expected to benefit from rapid digital transformation, rising adoption of contactless and cross-border payments, resilient consumer spending and strategic growth through mergers and acquisitions (M&A). Advancements in technologies like BNPL, biometrics and cryptocurrency are expanding market reach and boosting revenues. Continued technology investments and expected rate cuts support long-term growth and innovation across the sector. However, challenges such as heightened cybersecurity risks and inflationary pressures persist. Companies like Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , Fiserv, Inc. (FI - Free Report) , Fidelity National Information Services, Inc. (FIS - Free Report) and Global Payments Inc. (GPN - Free Report) are well-positioned to benefit from the industry's promising growth prospects.
About the Industry
The Zacks Financial Transaction Services industry is part of the Financial Technology or the FinTech space, including companies with diverse natures of businesses. The industry comprises card and payment processing and other solutions providers, ATM services and money remittance service providers, as well as providers of investment solutions to financial advisors. The players in this segment operate their unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use their products at millions of acceptance locations. Monetary transactions are done through these networks, offering a convenient, quick and secure payment method in several currencies across the globe. The industry is benefiting from the ongoing digitization movement triggered by the pandemic.
4 Key Trends That Remain Underway in the Financial Transaction Services Space
The Digital Transformation in Payment Solutions: The global shift toward contactless payment methods continues to accelerate, rendering traditional cash and check transactions increasingly obsolete. In response, leading companies in the financial transaction services space are introducing innovative payment technologies, such as cryptocurrencies, biometric authentication, QR code systems and Buy Now, Pay Later (BNPL) services. These advances not only extend market reach but also diversify revenue streams and enhance customer convenience. To stay competitive and maintain industry leadership, organizations are making substantial investments in cutting-edge technology. However, this widespread digital adoption also amplifies exposure to sophisticated cyber threats, including data breaches and financial fraud. Consequently, the development of secure payment infrastructures and robust fraud prevention mechanisms has become a top strategic priority.
Increased Cross-Border Transactions: Companies in the financial transaction services industry are poised to capitalize on rising international trade, increased travel activity and growing demand for reliable remittance solutions. Firms offering advanced cross-border payment platforms are particularly well-positioned, as these technologies enable smooth global transactions and facilitate efficient currency exchange management. Such capabilities are vital for businesses seeking to receive payments from international clients and make timely disbursements to global suppliers. Moreover, the ongoing expansion of the global workforce continues to drive the need for dependable and scalable remittance systems.
Favorable Consumer Spending Trends: Resilient consumer spending has benefited providers of financial transaction services, contributing to increased transaction volumes and higher revenues. The continued growth of e-commerce, supported by broader Internet penetration and widespread smartphone use, will likely sustain strong consumer spending. However, persistent inflationary pressures and recent tariff policies of the Trump administration could pose challenges, potentially curbing consumers’ purchasing power and impacting future spending patterns.
Strategic Expansion Through Mergers and Acquisitions: To build comprehensive digital financial ecosystems, firms in the financial transaction sector are increasingly leveraging M&A activities alongside their technology investments. These strategies are instrumental in enhancing service portfolios, achieving market diversification, enlarging customer bases and expanding international presence. With the Federal Reserve signaling possible rate cuts in later 2025, borrowing costs are likely to decrease further. This will encourage companies to seek financing for M&A transactions, enabling growth while preserving liquidity.
Zacks Industry Rank Instills Optimism
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. The Zacks Financial Transaction Services industry is housed within the broader Zacks Business Services sector. It currently carries a Zacks Industry Rank #58, which places it in the top 24% of 244 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one. The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate.
Before we present a few stocks that you may want to retain in your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, S&P 500
The Zacks Financial Transaction Services industry outperformed its sector and Zacks S&P 500 composite in the past year.
In the said time frame, the industry has grown 26.3% compared with the Business Services sector’s gain of 8.6%. The S&P 500 has rallied 11.4% in the same time frame.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the trailing 12-month Price/Earnings ratio, commonly used for valuing financial transaction services stocks, the industry is currently trading at 27.28X compared with the S&P 500’s 24.14X and the sector’s 27.38X.
In the past five years, the industry traded as high as 46.18X, as low as 21.55X and at the median of 27.93X.
Forward 12-Month Price/Earnings (P/E) Ratio
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
5 Stocks to Keep a Close Eye on
We are presenting five stocks from the Financial Transaction Services industry that currently carry a Zacks Rank #3 (Hold). Considering the current industry scenario, it might be prudent for investors to retain these stocks in their portfolio as these are well-placed to generate growth in the long term.
Visa: Headquartered in San Francisco, the company stands as a leading global force in digital payments. It continues to expand its reach through strategic alliances, renewal of existing agreements and targeted acquisitions. Robust growth across Latin America, Canada and the United States underpins its overall performance. Higher transaction volumes contribute to improved transaction processing fees, thereby boosting revenues. The company also places a strong emphasis on technology investments to enhance and advance its digital payment solutions.
The Zacks Consensus Estimate for Visa’s fiscal 2025 earnings is pegged at $11.35 per share, indicating an 12.9% rise from the year-ago figure. V’s earnings beat estimates in each of the last four quarters, the average surprise being 2.96%.
Price and Consensus: V
Image Source: Zacks Investment Research
Mastercard: Based in Purchase, NY, the company maintains its foothold in the global payments landscape through active collaboration with financial institutions and substantial strategic investments. Its Mastercard Cross-Border Services platform enables secure and efficient international money transfers. During the first quarter of 2025, cross-border volumes rose 15% year over year in local currency terms. The company has bolstered its operational strength through key acquisitions.
The Zacks Consensus Estimate for Mastercard’s 2025 earnings is pegged at $15.98 per share, indicating an 9.5% rise from the year-ago figure. MA’s earnings beat estimates in each of the last four quarters, the average surprise being 3.71%.
Price and Consensus: MA
Image Source: Zacks Investment Research
Fiserv: Headquartered in Wisconsin, Fiserv delivers a broad suite of solutions encompassing payment processing, core banking systems and digital banking services. Its business model is underpinned by recurring revenue streams and strong incremental margins generated from its scaled processing infrastructure. The company is focused on delivering exceptional performance by acquiring new clients, deepening existing relationships and offering value-enhancing solutions.
The Zacks Consensus Estimate for Fiserv’s 2025 earnings is pegged at $10.22 per share, indicating a 16.1% rise from the year-ago figure. FI’s earnings beat estimates in each of the last four quarters, the average surprise being 2.06%.
Price and Consensus: FI
Image Source: Zacks Investment Research
Fidelity National: Headquartered in Jacksonville, FL, Fidelity National is achieving revenue growth driven by strong performance across its Banking Solutions and Capital Market Solutions divisions. The Banking segment is seeing momentum from new client acquisitions. While the bulk of its income is generated from U.S.-based clients, the company also maintains a strategic presence in international markets such as the United Kingdom, Germany, Australia, Brazil and Canada.
The Zacks Consensus Estimate for Fidelity National’s 2025 earnings is pegged at $5.74 per share, indicating an improvement of 10% from the year-ago figure. FIS' earnings beat estimates in each of the last four quarters, the average surprise being 5.91%.
Price and Consensus: FIS
Image Source: Zacks Investment Research
Global Payments: The Atlanta, GA-based Global Payments is well-positioned for future growth, supported by solid performances in its Merchant Solutions and Issuer Solutions segments. The Merchant Solutions division stands to benefit from rising transaction volumes and an expanding base of U.S. merchant partners. At the same time, the Issuer Solutions segment is expected to gain momentum through the growth of core issuing clients. The company has enhanced its capabilities and extended its international reach through strategic acquisitions and alliances. Global Payments continues to prioritize substantial investments in technology.
The Zacks Consensus Estimate for Global Payments’ 2025 earnings is pegged at $11.10 per share. GPN’s earnings beat estimates in two of the last four quarters and missed the mark twice, the average surprise being 1.06%.
Price and Consensus: GPN
Image Source: Zacks Investment Research
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5 Financial Transaction Stocks to Watch Amid a Booming Digital Era
The Financial Transaction Services industry is expected to benefit from rapid digital transformation, rising adoption of contactless and cross-border payments, resilient consumer spending and strategic growth through mergers and acquisitions (M&A). Advancements in technologies like BNPL, biometrics and cryptocurrency are expanding market reach and boosting revenues. Continued technology investments and expected rate cuts support long-term growth and innovation across the sector. However, challenges such as heightened cybersecurity risks and inflationary pressures persist. Companies like Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , Fiserv, Inc. (FI - Free Report) , Fidelity National Information Services, Inc. (FIS - Free Report) and Global Payments Inc. (GPN - Free Report) are well-positioned to benefit from the industry's promising growth prospects.
About the Industry
The Zacks Financial Transaction Services industry is part of the Financial Technology or the FinTech space, including companies with diverse natures of businesses. The industry comprises card and payment processing and other solutions providers, ATM services and money remittance service providers, as well as providers of investment solutions to financial advisors. The players in this segment operate their unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use their products at millions of acceptance locations. Monetary transactions are done through these networks, offering a convenient, quick and secure payment method in several currencies across the globe. The industry is benefiting from the ongoing digitization movement triggered by the pandemic.
4 Key Trends That Remain Underway in the Financial Transaction Services Space
The Digital Transformation in Payment Solutions: The global shift toward contactless payment methods continues to accelerate, rendering traditional cash and check transactions increasingly obsolete. In response, leading companies in the financial transaction services space are introducing innovative payment technologies, such as cryptocurrencies, biometric authentication, QR code systems and Buy Now, Pay Later (BNPL) services. These advances not only extend market reach but also diversify revenue streams and enhance customer convenience. To stay competitive and maintain industry leadership, organizations are making substantial investments in cutting-edge technology. However, this widespread digital adoption also amplifies exposure to sophisticated cyber threats, including data breaches and financial fraud. Consequently, the development of secure payment infrastructures and robust fraud prevention mechanisms has become a top strategic priority.
Increased Cross-Border Transactions: Companies in the financial transaction services industry are poised to capitalize on rising international trade, increased travel activity and growing demand for reliable remittance solutions. Firms offering advanced cross-border payment platforms are particularly well-positioned, as these technologies enable smooth global transactions and facilitate efficient currency exchange management. Such capabilities are vital for businesses seeking to receive payments from international clients and make timely disbursements to global suppliers. Moreover, the ongoing expansion of the global workforce continues to drive the need for dependable and scalable remittance systems.
Favorable Consumer Spending Trends: Resilient consumer spending has benefited providers of financial transaction services, contributing to increased transaction volumes and higher revenues. The continued growth of e-commerce, supported by broader Internet penetration and widespread smartphone use, will likely sustain strong consumer spending. However, persistent inflationary pressures and recent tariff policies of the Trump administration could pose challenges, potentially curbing consumers’ purchasing power and impacting future spending patterns.
Strategic Expansion Through Mergers and Acquisitions: To build comprehensive digital financial ecosystems, firms in the financial transaction sector are increasingly leveraging M&A activities alongside their technology investments. These strategies are instrumental in enhancing service portfolios, achieving market diversification, enlarging customer bases and expanding international presence. With the Federal Reserve signaling possible rate cuts in later 2025, borrowing costs are likely to decrease further. This will encourage companies to seek financing for M&A transactions, enabling growth while preserving liquidity.
Zacks Industry Rank Instills Optimism
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. The Zacks Financial Transaction Services industry is housed within the broader Zacks Business Services sector. It currently carries a Zacks Industry Rank #58, which places it in the top 24% of 244 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one. The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate.
Before we present a few stocks that you may want to retain in your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, S&P 500
The Zacks Financial Transaction Services industry outperformed its sector and Zacks S&P 500 composite in the past year.
In the said time frame, the industry has grown 26.3% compared with the Business Services sector’s gain of 8.6%. The S&P 500 has rallied 11.4% in the same time frame.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the trailing 12-month Price/Earnings ratio, commonly used for valuing financial transaction services stocks, the industry is currently trading at 27.28X compared with the S&P 500’s 24.14X and the sector’s 27.38X.
In the past five years, the industry traded as high as 46.18X, as low as 21.55X and at the median of 27.93X.
Forward 12-Month Price/Earnings (P/E) Ratio
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
5 Stocks to Keep a Close Eye on
We are presenting five stocks from the Financial Transaction Services industry that currently carry a Zacks Rank #3 (Hold). Considering the current industry scenario, it might be prudent for investors to retain these stocks in their portfolio as these are well-placed to generate growth in the long term.
Visa: Headquartered in San Francisco, the company stands as a leading global force in digital payments. It continues to expand its reach through strategic alliances, renewal of existing agreements and targeted acquisitions. Robust growth across Latin America, Canada and the United States underpins its overall performance. Higher transaction volumes contribute to improved transaction processing fees, thereby boosting revenues. The company also places a strong emphasis on technology investments to enhance and advance its digital payment solutions.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Visa’s fiscal 2025 earnings is pegged at $11.35 per share, indicating an 12.9% rise from the year-ago figure. V’s earnings beat estimates in each of the last four quarters, the average surprise being 2.96%.
Price and Consensus: V
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Mastercard’s 2025 earnings is pegged at $15.98 per share, indicating an 9.5% rise from the year-ago figure. MA’s earnings beat estimates in each of the last four quarters, the average surprise being 3.71%.
Price and Consensus: MA
Image Source: Zacks Investment Research
Fiserv: Headquartered in Wisconsin, Fiserv delivers a broad suite of solutions encompassing payment processing, core banking systems and digital banking services. Its business model is underpinned by recurring revenue streams and strong incremental margins generated from its scaled processing infrastructure. The company is focused on delivering exceptional performance by acquiring new clients, deepening existing relationships and offering value-enhancing solutions.
The Zacks Consensus Estimate for Fiserv’s 2025 earnings is pegged at $10.22 per share, indicating a 16.1% rise from the year-ago figure. FI’s earnings beat estimates in each of the last four quarters, the average surprise being 2.06%.
Price and Consensus: FI
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Fidelity National’s 2025 earnings is pegged at $5.74 per share, indicating an improvement of 10% from the year-ago figure. FIS' earnings beat estimates in each of the last four quarters, the average surprise being 5.91%.
Price and Consensus: FIS
Image Source: Zacks Investment Research
Global Payments: The Atlanta, GA-based Global Payments is well-positioned for future growth, supported by solid performances in its Merchant Solutions and Issuer Solutions segments. The Merchant Solutions division stands to benefit from rising transaction volumes and an expanding base of U.S. merchant partners. At the same time, the Issuer Solutions segment is expected to gain momentum through the growth of core issuing clients. The company has enhanced its capabilities and extended its international reach through strategic acquisitions and alliances. Global Payments continues to prioritize substantial investments in technology.
The Zacks Consensus Estimate for Global Payments’ 2025 earnings is pegged at $11.10 per share. GPN’s earnings beat estimates in two of the last four quarters and missed the mark twice, the average surprise being 1.06%.
Price and Consensus: GPN
Image Source: Zacks Investment Research