We recently compiled a list of the 10 Best Digital Currency and Payments Stocks To Invest In. In this article, we are going to take a look at where Mastercard Incorporated (NYSE:MA) stands against the other digital currency and payments stocks.

The Digital Payment Revolution: Growth Trends and Insights

The digital currency and payments sector is rapidly evolving, driven by technological advancements and changing consumer expectations. Digital money continues to reshape how transactions are conducted, making them faster, cheaper, and more accessible. According to a report by The Business Research Company, the global digital payments market was valued at $115.93 billion in 2023. The market is expected to expand at a compound annual growth rate (CAGR) of 9.3% during 2024-2028 to reach a value of $180.26 billion by the end of the forecast period.

The rise of e-commerce and technology-driven initiatives is significantly boosting the digital payments market. Consumers are increasingly choosing non-cash payment methods because they are easier and more convenient for transactions. This trend is expected to lead to a growth in low-cost payment terminals and methods like QR codes in the near future.

A major driver behind this shift is the younger generations, particularly millennials and Generation Z, who are quick to adopt digital payment services. Online banking has become a popular choice among young users, who demand personalized and flexible experiences. As businesses adapt to these expectations, enhancing customer experience has become crucial for success in the competitive digital payment landscape.

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The McKinsey Digital Payments Survey 2024 reveals that the use of digital payments is steadily increasing in both the United States and Europe. Approximately 9 in 10 consumers in these regions have made at least one digital payment in the past year, with the US reaching a record high of 92%. In the US, in-app and in-store digital payments are growing rapidly. In-app purchases now account for 60% of digital payment usage, up by 8 percentage points since 2019. Additionally, the adoption of digital wallets for in-store transactions has risen from 19% in 2019 to 28% in 2024. This shift represents a significant market, with around $10 trillion spent annually by consumers across the United States and Europe.

Notably, the survey also found that about one in five users often leave their physical wallets at home, opting for digital payment methods instead. In-store digital wallet usage is similar between the US and several European countries. This also includes traditionally cash-heavy nations like Germany and Italy, where about a quarter of respondents reported using digital wallets for in-store purchases in the past year. This trend indicates a broader acceptance of digital payments among consumers across various markets.

Methodology

To compile our list of the 10 best digital currency and payments stocks to invest in, we consulted various online resources and also reviewed our own rankings. This exercise provided us with a list of the best digital money stocks. From an initial pool of more than 20 digital currency and payments stocks, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best digital currency and payments stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them.

Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 131

Mastercard Incorporated (NYSE:MA) is a prominent American payment technology company that operates in over 200 countries. It offers a variety of services, including payment processing and related solutions, designed to make transactions secure and accessible for consumers, businesses, and governments. Mastercard Incorporated (NYSE:MA) is one of the best digital payments stocks to invest in. In the third quarter of 2024, the company reported strong financial results, with net revenue reaching $7.37 billion, a 13% increase from the previous year. This growth was driven by an expanding payment network and a rise in value-added services.

Mastercard Incorporated (NYSE:MA) continues to focus on innovation and strategic acquisitions to enhance its service offerings. The planned acquisitions of Recorded Future and Minna Technologies aim to boost its capabilities in AI-powered threat intelligence and subscription management. These initiatives are expected to strengthen Mastercard’s (NYSE:MA) position in the competitive payments landscape.

The company is also making strides in contactless payment technology, with tap-on-phone solutions now available in over 110 markets. The number of tap-on-phone locations has almost doubled since the beginning of 2024, showcasing Mastercard’s (NYSE:MA) commitment to expanding payment accessibility.

On November 13, Mastercard Incorporated (NYSE:MA) announced its plans for transforming online shopping by 2030. The goal is to eliminate the need for physical card numbers and passwords, focusing instead on secure biometric authentication. This forward-thinking strategy positions Mastercard Incorporated (NYSE:MA) as a leader in the evolving digital payment space. With its strong financial performance, innovative strategies, and commitment to enhancing security and accessibility, Mastercard Incorporated (NYSE:MA) represents a compelling investment opportunity in the digital payments sector.

Overall MA ranks 2nd on our list of the best digital currency and payments stocks to invest in. While we acknowledge the potential of MA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.