Digital payment is gradually emerging as one of the most convenient ways of paying as it involves a hassle-free and contactless transaction. Users can enjoy the comfort of transacting quite simply from devices such as their smartphones and avoid carrying cash. Notably, per a
report by Grand View Research, the global digital payment market was valued at $58.3 billion in 2020 and is set to witness a CAGR of 19.4% from 2021 to 2028.
The report stated that the main factors expected to contribute to the growth are the rising adoption of smartphones as well as increasing e-commerce sales and improving global Internet penetration. Moreover, governments around the world are also taking initiatives to boost the adoption of digital payments.
Notably, the COVID-19 pandemic proved to be instrumental in boosting both e-commerce sales and digital payments. As people were compelled to maintain social distancing to curb the spread of the virus, they had to resort to online purchasing and embrace digital payments as a safe means of transaction.
In fact, the Grand View Research report stated that the payment processing segment accounted for more than 25% share of the global revenue in 2020. This is due to the increasing preference for online shopping throughout the world, which is prompting retailers to “adopt payment processing solutions to provide customers with seamless checkout experiences.”
Notably, the report also mentioned that North America accounted for over 35% of the global digital payment market revenues in 2020. In fact, per a
survey by McKinsey in the United States last year, penetration of digital payment reached 78% in 2020. Moreover, the survey showed significant gains from 45% in 2019 to 58% in 2020 in the share of consumers who were using two or more digital payment methods. The survey mentioned that the rising adoption indicated a deeper level of digital engagement and could be partly attributed to a pandemic-related behavior. Such developments are sure to help the digital payment method in becoming an increasingly preferred choice among consumers. 4 Stocks to Keep an Eye On
The digital payment market seems poised to witness further adoption as consumers continue to shift to this hassle-free form of transaction. Hence, this makes it a good time to keep an eye on companies focused on digital payments, that stand to benefit from this continued upswing. Notably, we have selected four such stocks that carry a Zacks Rank #1 (Strong Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank stocks here. Apple Inc. ( AAPL Quick Quote AAPL - Free Report) designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories worldwide. Notably, the company has its own cashless payment service called Apple Pay which allows users to make contactless and secure purchases in stores, in apps and on the web. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 11.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 36.3%. PayPal Holdings, Inc. ( PYPL Quick Quote PYPL - Free Report) operates as a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 1.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.5%. Amazon.com, Inc. ( AMZN Quick Quote AMZN - Free Report) engages in the retail sale of consumer products and subscriptions in North America and internationally. Notably, the company has its own online payment processing service named Amazon Pay. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 10.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.1%. Alphabet Inc. ( GOOGL Quick Quote GOOGL - Free Report) provides online advertising services in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through the Google Services, Google Cloud, and Other Bets segments. Notably, Google has its own digital payment platform called Google Pay, which enables users to make payments using their smart devices. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 10.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.5%. Legal Marijuana: An Investor’s Dream
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