One area of the tech sector which I think has significant potential is the payments industry.
Thanks to the proliferation of smart phones, changing consumer habits, and the meteoric rise of online shopping, a number of companies are aiming to disrupt the industry.
Three that have achieved this and look well-positioned for strong long term growth are listed below. Here's why I think they could be great long-term investment options:
Afterpay Ltd (ASX: APT)
Afterpay is a buy now pay later provider which has helped change the face of Australian retail over the last couple of years. It has also successfully exported its platform to both the United States and United Kingdom, resulting in meteoric customer and underlying sales growth. Pleasingly, with both consumers and merchants in love with its platform, the future looks increasingly positive. Especially given how more and more younger demographics are turning away from credit cards and looking for more suitable alternatives.
EML Payments Ltd (ASX: EML)
EML Payments provides technology solutions for gifts, payouts, rewards, and supplier payments. It has a strong and growing presence in the salary packaging and betting industries, providing easy access to benefits and funds. Demand for its services has been so strong, it has led to incredible profit growth. For example, in FY 2019 EML Payments delivered a 283% growth in net profit after tax of $8.45 million. Thanks to its strong core business and a recent game-changing acquisition, I believe the company is well-positioned to continue its strong form for a long time to come.
Pushpay Holdings Group Ltd (ASX: PPH)
The days of buckets being passed around in churches by pastors for donations are gone. Pushpay's donor management platform makes donating a seamless experience for both the giver and the receiver. Unsurprisingly, this has been well-received by churches in the United States, leading to strong market share gains over the last few years. Pleasingly, the company has just strengthened its offering with the recent US$87.5 million acquisition of church management system provider Church Community Builder. I expect this to support further strong revenue growth over the next decade.
