MoffettNathanson’s Senior Equity Analyst, Lisa Ellis, rated both Mastercard Incorporated (NYSE: MA) and Visa Inc. (NYSE: V) as stocks to watch and included in her ‘buy’ list. “What people don’t realize is that a lot of the spending if you use a service like a firm or Afterpay or PayPal, is actually going over cards, sometimes it’s a debit card instead of a credit card,” said Ellis in a short interview with CNBC.
“When you break up these transactions from one big Peloton to lots of investments for that Peloton, those underlying companies actually make more money because they make more money off of lots of smaller transactions instead of a big one.”, she said while noting that the rise of after pay companies like PayPal will be much of a benefit for Mastercard and Visa since they are the companies behind these famous payment services.
It’s obvious that Mastercard and Visa are both technology companies that are widely used in the global payments business. These kinds of companies are called card networks, and their task is to manage payment networks in areas or platforms where they provide their services. These businesses offer convenience to every people with regards to paying bills, online shopping, money transfer, and a whole lot more. According to Ellis, these types of transactions are popular especially with the younger millennials kind of newer coming into the credit space.
For her final words, Lisa Ellis said, “You can’t escape Visa and Mastercard. They are the rails sitting behind, typically funding every transaction in the debit card. They’re still sitting in the background, making money off of that transaction.”.