In this article, we will look at some of the best payment processing stocks offering attractive upside potential for investors.
On May 3, the Financial Times reported that private equity firm Francisco Partners is in talks to acquire Moneris, a payment processing company jointly owned by Royal Bank of Canada and Bank of Montreal. This proposed deal comes at a time when the payments sector is still undergoing substantial changes, driven by the rise in digital transactions and growing competition from financial technology companies.
In recent years, there has been pressure on traditional financial institutions to rethink their positions in merchant payment processing, as fintech companies have expanded their presence by offering faster digital payment solutions. This shift has contributed to a broader trend of banks divesting payment assets, while private equity investors and specialized payments firms are now looking for ways to strengthen their position in the market.
The payments sector remains an essential part of the financial services ecosystem as businesses and consumers depend more and more on electronic transactions. Moneris has developed into one of the largest merchant payment service providers in Canada, processing over 5 billion transactions per year. Francisco Partners is reportedly considering the acquisition as banks continue to focus on their core businesses while streamlining operations. With that background, let’s explore our 10 Best Payment Processing Stocks to Buy Now.
Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed payment processing companies with market capitalizations above $2 billion. Also, we only shortlisted stocks with at least 30% upside potential, according to consensus, as of the June 17 close. Finally, we selected 10 stocks with the highest upside and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Remitly Global Inc. (NASDAQ:RELY)
Remitly Global Inc. (NASDAQ:RELY) is one of the 10 best payment processing stocks to buy now. The company’s expansions into new geographies, through strategic integrations, support a favorable stance around the stock. On May 27, Remitly Global Inc. (NASDAQ:RELY) announced the integration of Bre-B, Colombia’s national instant payment system backed by Banco de la República, into its remittance network.
With just the recipient’s phone number, email address, or national ID connected to a partner bank account or digital wallet, customers can now send money to Colombia instantly and around the clock. In just 6 months, Bre-B has handled over 600 million transactions and accumulated over 34 million registered users, according to Banco de la República.
Within 6 weeks of its inception, the remittance platform’s Bre-B transaction volume tripled. Sending money is an act of care, according to Remitly Vice President Nick Moiseff, and this integration gives senders and recipients assurance that money will arrive promptly, consistently, and transparently.
The Bre-B system has also expanded the company’s current payout network in Colombia, which already consists of cash pickup services, conventional bank deposits, and mobile wallets like Nequi, Daviplata, and Bancolombia A La Mano.
Remitly Global Inc. (NASDAQ:RELY) is a cross-border payment company that delivers digital financial services, covering markets across Canada, the U.S., and internationally. It facilitates international money transfers and additional financial services through its mobile application and web platform.
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