Pacific Crests' Top Picks For Mobile And Online Payments

In a recent report, analysts at Pacific Crest Securities took a look at the rapidly expanding world of mobile and online payments. Analysts see the innovative technology as a positive for most participants in the space.

PayPal At A Crossroads

Analysts discuss eBay Inc's EBAY PayPal service and the new environment it is facing moving forward. For years, PayPal has had a major advantage over payment competitors that require manual card entry. PayPal has more than 161.5 million active accounts and $227 billion in total volume.

The recent reported acquisition of Paydiant suggests to analysts that PayPal plans to make a more aggressive push into both mobile and online payments. In the mobile space, competitors include Apple Inc.'s AAPL Apple Pay, Google Inc's GOOGGOOGL Google Wallet, and Samsung Pay. Online payment competitors include Stripe, WePay, Apple Pay, Google's Android Pay and Visa Inc's V Visa Checkout.

One possible source of trouble for PayPal is that recent data has shown a major skew toward credit in Apple Pay (69 percent), which could potentially mean pose a challenge for PayPal's ACH-dependent margin structure.

Google's Wireless Network

Google recently confirmed its plans to launch a wireless network service. The company has no plans to compete with existing services and will rather look to provide a unique alternative. According to the Wall Street Journal, Google's wireless network will pick up the best signal from multiple sources, ultimately leading to fewer dropped calls. Various unconfirmed reports suggest that Google will be partnering with Sprint Corp S and T-Mobile US Inc TMUS on the project.

Stock Picks

Pacific Crest analysts see the expansion of mobile and online payment as a positive for Visa, VeriFone Systems Inc PAY, Vantiv Inc VNTV, Google, T-Mobile and Sprint. Pacific Crest has an Outperform rating on Google, Visa, VeriFone and Vantiv.