The world is moving toward a cashless future, and Apple Inc. AAPL is at the forefront of this transformation. With Apple Pay and Apple Card becoming integral parts of its ecosystem, digital transactions are accelerating at an unprecedented pace. This presents a golden opportunity for investors to capitalize on the growth of digital payments.
Two companies that stand to benefit immensely from Apple’s digital push are Visa Inc. V and PayPal Holdings, Inc. PYPL. As Apple fuels the adoption of mobile wallets and cashless transactions, Visa and PayPal are positioned to ride the wave of increasing digital transaction volume. Here’s why these stocks should be in every investor’s portfolio.
Visa: Backbone of Digital Transactions
Visa is the world’s largest payment processor, handling billions of transactions worldwide. Its direct integration with Apple Pay gives it a massive advantage.
How Visa Benefits From Apple’s Growth
Visa continues to be a major beneficiary of Apple’s expanding digital payment ecosystem, as highlighted in its strong first-quarter fiscal 2025 results. With net revenues up 10% year over year and total payments volume exceeding $4 trillion, Visa’s role in facilitating digital transactions is more critical than ever. The company’s deep integration with Apple Pay ensures that every tap of a Visa card through Apple Pay contributes to its transaction revenues, reinforcing its leadership in digital payments.
The increasing adoption of contactless payments, including Tap to Pay, is a key driver of Visa’s growth. As Apple sells more iPhones, iPads and Apple Watches, consumers are using these devices for digital transactions at an accelerating pace. In the fiscal first quarter, 74% of all face-to-face transactions globally were Tap to Pay, with notable growth in markets like Japan, Argentina, and the United States. This surge benefits Visa directly, as its credentials power a significant portion of Apple Pay transactions worldwide.
Beyond consumer transactions, Visa is capitalizing on the broader digital payment shift. Its global partnerships with major banks and fintech players, including expanded agreements with ICICI Bank, Kotak Mahindra Bank and HSBC in India, further strengthen its market presence. The company is also driving innovation through Visa Direct, which saw a 34% increase in transactions, enabling real-time payments for use cases like peer-to-peer (P2P) transfers, remittances and gig economy payouts.
Security remains a key advantage of Visa’s network. Apple Pay’s reliance on Visa’s tokenization technology — up 44% year over year with more than 12.6 billion tokens issued — enhances transaction security, reducing fraud rates while increasing approval rates. This seamless, secure integration makes Visa an attractive choice for financial institutions and merchants expanding their Apple Pay acceptance.
Visa’s robust earnings, strong merchant adoption and continued investments in tokenization and real-time payments position it as a long-term winner in the digital payments space. As Apple’s ecosystem grows, Visa’s strategic role ensures a steady stream of transaction revenues, reinforcing its leadership in the evolving financial landscape.
PayPal: Innovator in Digital Payments
While Visa runs the backend infrastructure of digital transactions, PayPal is a leader in online payments, peer-to-peer (P2P) transfers and e-commerce transactions. Apple’s expansion into digital payments further strengthens PayPal’s market position.
How PayPal Benefits From Apple’s Digital Push
PayPal is poised to capitalize on Apple’s expanding digital payment ecosystem, particularly as online transactions and mobile-first payment solutions gain traction. The company’s fourth-quarter 2024 earnings call highlighted strong growth in its branded checkout and Venmo platforms, both of which align well with Apple’s push for seamless, mobile-driven financial transactions.
With Apple Pay adoption increasing, more users are likely to integrate their PayPal accounts within Apple’s ecosystem, driving transaction volume. PayPal’s strategic emphasis on innovation — evident in initiatives like PayPal Everywhere and Fastlane — positions it as a key enabler of frictionless payments across e-commerce and omnichannel retail. Venmo, which saw a 30% increase in debit card monthly active users and a 20% rise in Pay with Venmo usage, is also benefiting from the broader shift toward mobile transactions, a trend Apple Pay fuels.
Beyond consumer payments, PayPal’s merchant solutions, including Braintree and PayPal Complete Payments, reinforce its role in bridging Apple Pay with millions of businesses. PayPal’s focus on partnerships — such as recent integrations with major brands like Instacart and JetBlue for Venmo payments — mirrors Apple’s strategy of embedding its payment services across industries.
Given PayPal’s accelerating innovation, strong merchant adoption and growing transaction margin dollars, its deep integration with Apple’s payment network cements its position as a leading digital payments player. As Apple continues expanding its payment offerings, PayPal stands to benefit significantly, reinforcing its relevance in the evolving financial landscape.
Final Words on Visa & PayPal
Investors looking to capitalize on Apple’s digital payments revolution should consider buying Visa and PayPal, both carrying a Zacks Rank #2 (Buy). With both companies set to profit from the global shift toward cashless transactions, they present a compelling long-term investment opportunity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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