One side of the technology sector which I think is a great place to invest is the payments industry.
Due to the proliferation of smart phones, changing consumer habits, and the meteoric rise of online shopping, a number of companies have been disrupting the industry.
Two payments companies that have really caught the eye in recent years are listed below. Here’s why I think they could be great long-term investment options:
Afterpay Ltd (ASX: APT)
The first payments company to look at is Afterpay. I believe it could be a great long term option for investors due to its leadership position in a buy now pay later industry growing very quickly thanks to the increasing popularity of the payment method with both consumers and merchants. Another big positive is the ongoing shift to online shopping which has been accelerated by the pandemic.
In light of these factors, I’m expecting another very strong performance in FY 2021. After which, I expect Afterpay to continue its positive growth trajectory over the coming years due to its international expansion. The company has recently entered the European market, has its eyes on a potential expansion in Asia, and moved in-store in the $5 trillion United States market. Overall, I continue to believe Afterpay has the potential to become a payments giant in the future.
Pushpay Holdings Group Ltd (ASX: PPH)
Gone are the days of buckets being passed around in churches by pastors for donations. Today, Pushpay’s donor management platform makes donating a seamless experience for both the giver and the receiver. Unsurprisingly, this and its community engagement solution have been well-received by churches in the United States and led to a surge in customer numbers over the last few years.
This has underpinned exceptionally strong sales and earnings growth. Pleasingly, more of the same is expected in FY 2021, with Pushpay expecting to more than double its operating earnings once again. The even better news is that this growth isn’t expected to end any time soon. Pushpay is aiming to capture a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity, which is almost 7 times greater than the revenue it generated in FY 2020.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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