The international conference regarding the Electronic Payments industry was attended by Jefferies analyst, Jason Kupferberg. The analyst highlighted important points he observed during the conference in his report, including the following.
The sentiment regarding the future of Visa (NYSE:V) and Mastercard (NYSE:MA) remained largely positive and the open loop networks are now positioned quite comfortably to deliver in the long term. The investments are now headed towards tokenization and making APIs available to third parties to remain relevant in the face of rising popularity of internet of things. Visa and Mastercard remain safe and offer long term growth and profits.
The second highlight was PayPal (NASDAQ:PYPL) which continues to dominate the in-browser payments. Despite growing competition and big tech stocks entering the market (Amazon, Visa, Mastercard, and Apple) PayPal remains unfazed and panelists showed confidence in PayPal’s ability to retain its market share amid rising competition. The introduction of OneTouch and Venmo has further strengthened PayPal’s position.
The mobile wallet market is growing at quite a sluggish pace; only 10% of all in-store payments to be made by Mobile wallets by the end of the next 5 years. The panelists remained of the opinion that mobile adoption will be slow and no significant rise can be seen in the next 5 years.
EMV adoption has become increasingly difficult as merchants. This can be traced back to the friction created between issuers and merchants by chargebacks. It is assumed that the adoption will take a longer period of time than originally anticipated and will likely last through 2019.
Tailwinds to acquire merchants remain strong as the analyst expects a few years at the very least before the integrated channel reaches saturation. The acquirers will likely continue to derive benefits from changes in the technology such as, EMV, mobile wallet and POS transformations.
The analyst sees growth in electronic payments industry as a whole, as the spread of technology continues to reach third world countries.