Card payment options and a surge in e-commerce has created a new era in how we complete transactions. The coronavirus pandemic has accelerated the death of cash with many conducting their business and discretionary transactions via alternative methods. With the World Health Organization also advising people to use contactless payment to reduce the risk of transmission, it’s heightened people’s consciousness of cash handling.
Here are 2 ASX stocks that could benefit from the death of cash.
EML Payments Ltd (ASX: EML)
EML Payments is an Australian fintech company providing technology solutions for payouts, gifts, rewards and supplier payments. The company has a large presence in Australia, North America and Europe, issuing mobile, virtual and physical card solutions.
The coronavirus pandemic has seen EML’s retail segment struggle, however, its salary packaging and online gaming businesses have outperformed. In a recent trading update, EML reported a 55% increase in Gross Debit Volume of $9.83 billion and a 20% increase in revenue of $87.1 million for the 9 months ending 31 March. Despite being sold-off earlier this year, the EML share price has bounced more than 173% from its March low and is poised to head higher.
Pushpay Holdings Ltd (ASX: PPH)
Believe it or not, the Pushpay share price has surged more than 181% from its March low and is now trading at all-time highs. Pushpay provides donor management services and finance tools targeted towards non-profit, religious and education providers. The company predominately operates in the US and has digitised the way people make donations.
With many churches and religious gatherings banned during the coronavirus pandemic, Pushpay has emerged at the right place, at the right time. The company’s platform has enabled people to make donations whilst also abiding by social distancing measures.
Earlier this month Pushpay released its annual report, posting a 32% surge in revenue for the full-year. The company also noted the successful acquisition of US software company Church Community Builder, allowing Pushpay to provide more innovative solutions for customers.
Pushpay expects further revenue growth in the future as more customers adopt mobile technology, post-pandemic. As a result, the company is targeting 50% of the medium and large church segments in the US and expects EBITDAF in the range of US$48 million and US$52 million for FY21.
The coronavirus pandemic has brought with it many permanent changes in consumer behaviour, such as online shopping and greater attention to infection control. Although cash may, realistically, never be replaced, EML and Pushpay reflect the exciting opportunities and innovations available to investors on the ASX.
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As of 7/4/20
Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.