Even though data security breaches and increasing cyberattacks remain a concern for the digital payment processing industry, the surge in digital financial transactions makes its prospects bright. In addition, the Federal Reserve is expected to raise rates by 50 basis points and get even tougher with interest rate hikes to drive down inflation, which should help the overall financial services sector, which includes the payment processing companies, expand their profit margins. According to the latest report by Reports and Data, the digital payments industry’s revenue is expected to grow at a CAGR of 13.6% by 2028. Therefore, both Visa Inc. (V) and Block, Inc. (SQ) should benefit.
V is a payments technology company that facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network. SQ creates tools that enable sellers to accept card payments and provides reporting and analytics and next-day settlement. It includes hardware products, including Magstripe reader, Contactless and chip reader, and Square Stand.
