With the global shift in consumer payment options, investors should take heed of payment processing innovations that are quickly transforming banking transactions around the world. With 85% of global retail trade in cash, there is a major market for growth in the payment industry in the years to come. Although Visa Inc (NYSE:V) is the largest player in the payment processing field, there is definite room for growth in the payment processing game.
For the business merchant
With Visa Inc (NYSE:V) having recently released earnings with revenues topping $1.3 billion, up 17% from the previous year, the company is leading the pack in payment processing. With innovative technology and strategic acquisitions, Visa Inc (NYSE:V) is grabbing land in the emerging payment space. With Visa extending its contract with Monitise and acquiring Fundamo, it is putting itself in a position of becoming the industry leader for both banked and unbanked consumers worldwide. Monitise is a payment technology company while Fundamo is a mobile financial services providerin developing economies. Both these companies will enhance Visa Inc (NYSE:V)‘s services, while continuing to drive its growth in emerging markets.
For the traveler
Chip technology has been around since 2004, though there are few banks in the United States that have chips in their everyday cards. For frequent globe trotters, chip-enabled cards offer the most protection for international travel.
Bank of America Corp (NYSE:BAC) has offered chip-embedded credit cards for several years, but most of these cards are not available to the average credit card user. These cards, armed with an embedded microprocessor chip, are the best choice for secure payments by encrypting and storing the account information at the time of transaction. Most of these cards are issued in the U.K. and Canada, but some of Bank of America Corp (NYSE:BAC)’s domestic credit card lines offer them as well. These cards are more secure than regular cards and are critical for overseas secure travel.
Credit cards with chip technology, also known as EMV (EuroPay Mastercard Visa), improves both the convenience and security of customers’ transactions when traveling abroad. “We want our customers to have the best possible experience while making purchases with their credit cards anywhere in the world,” explains Susan Faulkner, the head of Bank of America’s Consumer and Small Business Products division. Many countries outside of the United States have already converted from magnetic strips to EMV technology as the payment system has evolved internationally.
With Google Inc (NASDAQ:GOOG) Wallet, merchandisers and online shoppers can have access to a virtual wallet system that allows both payers and payees to send and receive money. Google Inc (NASDAQ:GOOG) hopes that the widespread NFC infrastructure that supports Google Wallet will become more prevalent as more consumers move to a pay-and-go system. One of the advantages to using Google Wallet is that the user has access to all his cards in a mobile device. If paired with a smartphone, Google Inc (NASDAQ:GOOG) Wallet would have the capacity to handle payments easily, as well as become a universal form of currency.