4 War-on-Cash Stocks To Win Big In 2020

Lately, war-on-cash stocks or companies that focus on digital payments have been some of the biggest gainers. After all, we are all heading toward a cashless society. Physical forms of payments, including cash and personal checks have lost importance, and paved the way for debit and credit cards, digital wallets and mobile commerce platforms.

E-commerce, in particular, has played a major role in increasing the demand for digital-based payments. Especially, in emerging economies, billions of customers have flocked toward digital payment platforms for money management issues. Visa CFO Vasant Prabhu said that “e-commerce is growing 5x as fast as face-to-face transactions. And in an e-commerce transaction, the propensity to use a Visa card is twice as high as a face-to-face transaction. So, something growing 5x as fast where your propensity to be used is twice what it might have been. That’s phenomenal.”

Another reason why customers are moving toward cashless payments is rise in mobile payments. This has revolutionized the way we spend, helping make contactless payment through smartphones. Needless to say, consumers nowadays are more willing than ever to use mobile devices to split a bill, pay back a friend or pay a babysitter.

So, how does mobile payment work? At a point-of-sale, especially at a supermarket checkout counter, smartphones use near field communication system to make payments without a debit/credit card. During purchases, the mobile device sends the consumer’s payment details through the Internet to the merchant’s website or app, thus, making payments less complex. With the trend catching up, the mobile payment market is widely expected to touch $4.5 trillion in 2023.

But war on cash has been occurring for several years. This is because it is cheaper to produce digital currency than paper. IRS can track digital income more easily compared to paper. The Fed too prefers digital currency, and most importantly corporates are making a lot of moolah from this global shift. With that in mind, here are the best performing war-on-cash stocks for 2020 –

Mastercard

Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services in the United States and internationally. Mastercard’s over payment volumes are now up 14% over the last 12-month period, but it’s the international payment volumes that are up 16%. This is an important development as nearly 70% of Mastercard’s payment volumes come from outside the United States unlike its rival Visa Inc’s (NYSE:V) 54%. In other words, Mastercard’s payment volumes have picked up when it mattered the most for the company.

Mastercard’s strategic acquisitions, alliances and technology upgrades, along with product-diversification and geographic-expansion initiatives also augur well for long-term growth. The company, currently, has a Zacks Rank #2 (Buy). You can see Zacks Investment Research

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Written By: Zacks Investment Research