Credit Suisse Is Bullish On Payment Processors, Notes 'People Will Not Stop Buying Things'

Paul Condra of Credit Suisse initiated coverage of companies involved in Payments & Fin-Tech, noting that the industry's fee-per-transaction model "benefits from massive volumes" and transactions on a fixed-cost processing base. According to Condra, there were a total of 357 billion global non-cash transactions in 2014. In 2013, the total global payment card volume corresponded to $16.3 trillion. The analyst noted that this makes the payments space "attractive" because simply enough, "people will not stop buying things" – especially as consumers continue turning more towards online shopping. In order to satisfy the growing demand for payments and fin-tech, providers are rushing to provide the consumer base with a compelling and unique proposition. Naturally, this implies investors can find attractive opportunities in the growing space.

Here is a summary of Condra's top-Outperform rated US picks.

(NYSE:

) has an attractive exposure of 35 percent to a high growth business, corporate payments. The analyst suggested that the company could see margin expansion in 2016 from pricing initiatives, benefits from recent M&A activity, and a profitable European business.

(NASDAQ:

) is a prepaid payment network that offers gift, telecom and debit cards. According to Condra, the company is expected to sustain a mid-teens earnings per share growth given its "strong" competitive moat. The stock also offers a "relative value for growth" of 16x 2017PE and should also expand its margins over the longer-term.

(NYSE:

) provides payment and digital commerce solutions. The company is benefiting from "strong fundamental trends," especially in tech-enabled processor channels. In addition, the company offers a diversified portfolio across online/integrated/international channels. The analyst added that investors could also own a basket of Global Payment's peers to diversify risk while gaining the exposure to the strong growth trends.

(NYSE:

) provides card payment processing services to merchants. The analyst noted that the company has a differentiated direct sales model with a niche focus on education/restaurants. Similar to Global Payments, investors should consider owning a basket of peers.

(NYSE:

) operates two segments offers payment processing services and card processing services. The analyst stated the company operates a "high quality" integrated/online payments assets that works with large merchants. Finally,

(NASDAQ:

) offers investors the "highest exposure" to the fastest growing segment of payments in online and mobile. The analyst noted that the stock will become "more investable" after a couple "sold quarters" laps.