Bernstein: 10 Disruptive Forces In Payments For 2018

The world of payments is ripe for disruption, and Bernstein's Lisa Ellis recently outlined what she said are the top 10 disruptive forces in the payments business. There's much money to be made as the world transitions to the next era of payments, the analyst said. 

“Entering 2018, with most payment stocks near all-time highs and peak multiples, we believe that disruptive forces will dominate the narrative for the payments stocks."

Trends To Watch

Here’s a rundown of what Ellis said are the sectors top 10 disruptive forces. (See Ellis' track record here.)

How To Play It

With so many moving parts, it’s difficult to make predictions about how the payment space will evolve in 2018, but Ellis said at least a handful of companies are in a prime position to benefit. Bernstein’s top 10 disruptors in the payment space are:

• Alibaba Group Holding Ltd (NYSE: BABA)’s Alipay and Tencent’s WeChat Pay.
• Amazon.com, Inc. (NASDAQ: AMZN) Pay and Apple Inc. (NASDAQ: AAPL) Pay’s “checkout buttons.”
• Peer-to-peer payment competition.
• Tokens and advanced authentication.
• “Push” payments.
• Revised payment service directives and "the broader threat of nationalism."
• Business-to-business payments.
• Payment, IT and e-commerce integration into small- and medium-sized businesses.
• Mergers and acquisitions.
• Cryptocurrency.

Mastercard Inc (NYSE: MA), Outperform rating, $195 price target. Bernstein's top overall payment stock. 

• Visa Inc (NYSE: V), Outperform rating, $145 price target.
• Paypal Holdings Inc (NASDAQ: PYPL), Outperform rating, $96 target.
• First Data Corp (NYSE: FDCA), Outperform rating, $20 target.

Price Action

Each of Ellis’ top four stock picks traded higher on Friday by more than 1.2 percent. First Data led the charge with a 3.3-percent gain and was up 0.53 percent at the time of publication late in Friday's trading session. 

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