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 Global Payments Inc. (NYSE:GPN) 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.
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).
Is Global Payments Inc. (GPN) The Best Digital Currency and Payments Stock To Invest In?
A payment terminal in action with customers apart of the experience.
Global Payments Inc. (NYSE:GPN) is a leading American financial technology company that provides payment solutions to merchants, issuers, and consumers worldwide. The company specializes in point-of-sale technology, software solutions, and processing payments through various channels, including credit and debit cards, as well as digital and contactless payments.
At its 2024 Investor Conference in September, Global Payments Inc. (NYSE:GPN) outlined its strategic focus on becoming the preferred partner for commerce solutions globally. The company aims to unify its Merchant Solutions under the Genius brand and expand these offerings internationally. This strategy targets small and medium-sized businesses (SMBs), providing them with comprehensive software and commerce enablement tools to help them grow. Additionally, Global Payments Inc. (NYSE:GPN) is enhancing its Issuer Solutions through cloud modernization and cross-selling initiatives. The company anticipates that operational transformations will unlock more than $500 million in adjusted run-rate operating income benefits by the first half of 2027. This focus on efficiency and innovation positions Global Payments Inc. (NYSE:GPN) for sustainable growth.
The company has entered into a definitive agreement to sell AdvancedMD, highlighting its commitment to optimizing its portfolio. Additionally, during the third quarter, Global Payments Inc. (NYSE:GPN) launched its point-of-sale (POS) solutions in Germany. The company aims to expand its point-of-sale (POS) solutions into new markets outside of the US, including key additional international markets like Mexico, Ireland, Poland, Austria, and Romania. Given its strategic initiatives and focus on innovation, Global Payments Inc. (NYSE:GPN) represents a compelling investment opportunity in the digital payments space.
Overall GPN ranks 5th on our list of the best digital currency and payments stocks to invest in. While we acknowledge the potential of GPN 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 GPN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
