Mobile payments are one of the biggest trends for investors to capitalize on in the next few years.
And I’m far from alone in my bullishness on the sector.
“Payments are a huge deal worldwide,” this according to Warren Buffett at last year’s Berkshire Hathaway shareholder meeting when asked about his company’s stake in some of the country’s largest players — Visa (NYSE: V), Mastercard (NYSE: MA) and American Express (NYSE: AXP). I am not one to argue with Warren Buffett.
He’s also placing bets on the payment-processing space, investing in recent IPO StoneCo (NASDAQ: STNE) and Paytm, India’s largest mobile-payments service.
Buffett has a history of being wary of technology stocks, with the exception of Apple. This is a big endorsement of the sector from the Oracle of Omaha.
Mobile Payments Growth
According to Capgemini’s World Payments Report 2018, global non-cash transactions are expected to increase at a compound annual growth rate (CAGR) of 12.7% through 2021.
The report also showed debit and credit card use on the rise, with transaction volume for debit cards increasing 15% in the most recent period measured, and credit cards transaction volume up 11%.
Here are 3 stocks “killing it” in the mobile payments sector.
Its debut product was a small, white square that can be attached to devices such as smartphones and tablets to process credit card payments.
But this was just the tip of the iceberg for the burgeoning company. Square now has a robust and growing suite of applications aimed at entrepreneurs, small businesses and consumers. These include Square Payroll, Square Capital, Square for Restaurants and the Cash App.
The combination of Square’s easy-to-use front-end devices and powerful point-of-sale software is translating into rapidly growing market share.
And third-party data released in August showed that, for the first time, downloads of the company’s Cash App surpassed that of PayPal’s Venmo, the perceived leader in the peer-to-peer payment space.
A Dream to Trade
Square was an absolute dream for income investors. For the last year, we’ve traded Square 25 times in my Options Income Blueprint service.
And we are 25 for 25 in winning SQ trades.
Active traders who sell puts on the stock every week have the chance to make between 175% and 206% a year.
As I’ve been saying, I see the payment-processing sector as one of the most lucrative spaces for income traders like us. Long-term investors while using short-term options to generate cash.
These payment giants aren’t the only options for investors, but few tech startups have managed to achieve their kind of scale. One exception is PayPal (NASDAQ: PYPL), which is one of my favorite companies and stocks to trade in the payment-processing space.
The company’s focus on e-commerce is one reason for its success. According to a recent article in Barron’s, PayPal is now accepted by 22 million merchants, has 277 million users and processes 27 million transactions a day. And close to 80% of the top 500 internet retailers use the company’s “Checkout” button.
The stock has been on a tear, nearly tripling in price in the past three years, and it shows no sign of slowing down. More importantly for us, its options are liquid and throw off terrific premiums.
My favorite of the major card providers is Visa (NYSE: V). Visa is the world’s largest payment processor, with over 3 million cards in use processing over 188 billion transactions every year.
It has a stronger brand and a more powerful network than Mastercard (NYSE: MA) and a more inclusive business model than Discover (NYSE: DFS) or American Express (NYSE: AXP). That makes Visa more attractive to merchants and making it a challenge for competitors to break through.
Visa stock is up 37% in 2019 and despite trading in a relatively stable manner, the stock’s options throw off large premiums.
Selling puts every week can earn traders between 64% and 91% a year.
Get in on our Next Mobile Payments Options Trade. This Special Report will teach you how to instantly add CASH to your account every week, every month and every quarter selling options on stocks like Square, VISA and Paypal. Create Your Own “Extra Pay Day” Every Week.
Michael Shulman is a 30 Year Veteran of the financial markets – as a trader, a financial analyst, a financial writer and most recently as an educator.
Michael made his first option trade in 1985 – COMPAQ Computer calls – a position that expired worthless. His second trade broke even; the third brought him a year’s salary, a near twenty to one return on his investment. Michael entered the financial publishing business formally in 2001 as director of research for ChangeWave Research’s institutional research business. He also was the senior writer and editor of Hedge Fund Investing.
Michael has published two books – Sell Short and Made in America – both of which can be found on Amazon.com He is a frequent contributor to reputable financial sites like Seeking Alpha, MSN, MainStreetInvestor, and Traders Reserve.
Selling Options Expert
Since 2010, he has dedicated himself to teaching investors how to get more income from their portfolios using simple yet safe options selling strategies which produce income every week. This approach was developed from the ground up in Michael’s own accounts. His goal to develop a strategy that cannot be replicated by institutional investors of any size and yet provide a consistent approach for individual traders.
Michael’s trade recommendations in his Options Income Blueprint, Perpetual Income Portfolio Club and Income Masters services maintain a 98% success ratio producing the expected income 98% of the time. No one’s perfect.