Its estimated that by2019,the value of the mobile-based payments will surpass $142bn in volume in the US alone, up from around $50bn currently. And the likes ofMonitise(LSE: MONI),Paypoint(LSE: PAY) andOptimal Payments(LSE: OPAY) are going to find it difficult not to profit from this growth.
Whats more, even though the size of the US mobile-based payment industry is set to nearly triple over the next four years, at its peak mobile payments will only total around 1% of the$16trnUSconsumer paymentsmarket.
So, Monitise, Paypoint and Optimal arent going to run out of customers seeking their services any time soon, and all three companies are set to profit in different ways from the growth of the mobile payments market.
After years of broken promises and missed expectations, many investors havegivenup on Monitise. However, the mobile money company has a few tricks left up its sleeve.
For example, over the past few years the group has built some extremely valuable partnershipswith banks and other key companies, which have given it an edge over peers.
And as Monitise completes its transition from a one-time license fee business model to a subscription-based model, these partnerships should help the company drive sales growth.
After this years management overhaul, Monitise is well placed to capitalise on the mobile payment market growth, andthis billionaire is convincedthat Monitise is one of the best plays on the mobile payments industry.
Paypointis the UKsleading consumer payments processor, and the company is one of the better bets on the growth of the mobile-based payments market.
Paypointsearnings per share are set to rise at a steady 6% to 7% over the next three years, which isnt that impressive. Moreover, the company is trading at a premiumvaluationof 15 times forward earnings.
Still,Paypointhas acash-richbalance sheet with a cash balance of 28m reported at the end of December, after paying an interim dividend of around 8m. This cash figure works out at around 40p per share. And if you strip out cash from Paypointsvaluation, the company trading at an undemanding forward P/E of 13.9.
Paypoint current supports a dividend yield of 4.4%, and City analysts expect this yield to hit 5%next year.
All-in-all,Paypointis a cash rich company with an impressive dividend yield thats set for steady growth over the next five years.
Optimal Payments recent deal to acquire the Skrill e-wallet the largest competitorto its own Neteller business has transformed Optimals outlook. The deal has doubled the size of Optimal almost overnight, and it has allowed the company to grab a large chunk of the European online payments market.
Unfortunately,Optimals size, and the companys prospects, have pushed up its valuation, making it a rather expensive play on the mobile payment market.
Optimal currently trades at a forward P/E of 17.3, which does seem expensive. The companys earnings are only set to expand 11% this year, although growth is expected to pick up slightly during 2016.
City analysts are expecting Optimals earnings to expand by 14% during 2016 putting the company on a 2016 P/E of 15.2. Unlike Paypoint, Optimal does not offer a dividend payout at present.
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