Keefe, Bruyette & Woods Look at Payment Stocks

July 16, 2018         By: Steven Anderson

Without stock, most of the mobile payment applications we know today likely wouldn’t exist. Stock represents the ability companies can put into research and development, and from there, new products to come. Keefe, Bruyette & Woods (KBW) recently dropped word our way about their upcoming look at the payment stock front, and it found some rather unexpected things going on therein.

One of the biggest finds in the KBW study was networks experiencing strong volume growth, a trend that’s not only been going on for some time now, but also one that doesn’t show any real signs of slowing down. The study pointed out that Mastercard had had several “key wins” over the first quarter of 2018, and that Visa was also looking to potential pricing changes in Europe. While metric growth was leaning a bit toward Visa’s favor, Mastercard has previously “…demonstrated a propensity to outperform our expectations.”

Meanwhile, KBW also noted that the integrated payments market was intense and packed with competitors, but the market was not yet fully saturated. KBW notes there is “a significant addressable market” still in play, and integrated payments will be a big part of the payments field going forward. KBW even pointed to PayPal’s recent Investor Day, a move which drove share prices up two percent during the day alone and about six percent in the following days.

Naturally, there’s a certain amount of guessing that’s taking place here, so you have to take it with a grain of salt. But KBW’s assertions that the mobile payments market is a dynamic place with lots of ups, downs, and opportunities is no less valid now than it was three or four years ago. There’s a lot going on in this field. Saying there’s a “significant addressable market” herein is almost catastrophic understatement on par with “the sun is hot.”

So basically, we should look forward to a lot more developments in this sector. While mobile payments has some clear winners already, there have been surprisingly few losers in the field. We may see some more of each, but we’ll likely see new developments cropping up in here as well.