- Non-bank payment processing at $1.2 trillion, with 12.8% CAGR forecast through 2021
- Large bank takeovers already underway
- NETE operating the right business in the right sector at the right time
Savvy investors always look to capitalize on hot sectors of the market and often single out potential winners in such uptrend niches. Short-term traders and long-term investors alike seek out stocks in sectors on the upswing and aim to position themselves prior to large upside moves. Though it may be perceived as mundane, payment processing is proving to be a just hot growth sector grabbing global investor attention.
A recent article published by MarketWatch (http://dtn.fm/0mPnD) clarified the opportunity. Preliminary takeover approaches from J.P. Morgan Chase & Co. (NYSE: JPM) spurred frenzied interest in payment processor Worldpay Group PLC (OTC: WPYGY) and rapidly drove its stock to new highs. More importantly, this activity highlighted the growing value of the payments processing business.
In the MarketWatch piece, Ken Odeluga, a market analyst at City Index, stated, “Interest by the U.S.’s largest bank, J.P. Morgan, points to an identification of digital-payment processing as one of highest potential spheres of remaining growth in financial services, particularly if we assume that retail banking in Western markets is near saturation point.”
This becomes even more apparent when realizing that total digital payment transactions outside of conventional providers like banks are projected to be worth roughly $740 billion this year and are expected to increase at a compound annual growth rate of 12.8% through 2021, exceeding $1.2 trillion by the end of the period.
Net Element, Inc. (NASDAQ: NETE), a technology-driven mobile payments and transactional services company, is perfectly positioned is this explosive sector and poised to capitalize on this growth curve. Net Element provides turn-key services, including the technology and services required for cashless transactions, to small- and medium-sized businesses throughout the United States and in select international markets. The company’s products and services include mobile payments, value-added services, marketing solutions and business analytics. Through its wholly-owned group of companies, Net Element’s global divisions support electronic payments acceptance in an omni-channel environment spanning across point-of-sale, e-commerce and mobile devices.
The South Florida Business Journal recognized Net Element as one of the fastest growing technology companies in the United States last year, and, in 2012, the company’s Unified Payments division was named the fastest-growing private company in America by Inc. magazine. Already exhibiting strong domestic growth, the company added a record number of merchants to its customer base in Q1 2017, and Net Element is simultaneously launching expanded international efforts. With significant footprints already established in select international markets, Net Element expects to broaden its global presence by leveraging its omni-channel platform into targeted emerging markets.
At first blush, payment processing doesn’t seem like an exciting investment opportunity, but don’t try to convince the shareholders of Worldpay, who just enjoyed a 33% surge in share price. Payment processing is proving to be one of the highest potential spheres of growth in the financial services arena. As the value becomes more recognized, it’s easy to envision Net Element as the next beneficiary of this growth and a subsequent surge in value.
For more information, visit the company’s website at www.NetElement.com
