There are some ASX payment shares that could make compelling ideas to think about for the long-term.
The world is steadily moving towards contactless payments and online payments for products and services. There are a group of businesses that are enabling that transition.
Whilst Visa, Mastercard and PayPal get a lot of the global attention, there are some ASX payment shares that are also leading the charge for certain clients.
Image Source: Commonwealth Bank
Tyro Payments Ltd (ASX: TYR)
Tyro is a business that provides payment solutions and value-adding business banking products. It had close to 37,000 Australian merchants using Tyro at 31 December 2020.
It processed more than $12 billion of transactions in the first half of FY21. Tyro processed more than $20 billion in FY20. In the 2020 financial year it made $93.5 million of gross profit, then in the first half of FY21 it made $61.2 million of gross profit.
In FY21 the business processed over $25.4 billion of transactions, which was an increase of 26%. July 2021 (to 30 July) saw an increase of 24% over the prior corresponding period in July 2020.
Tyro says it's Australia's fifth largest merchant acquiring bank by the number of terminals in the market, behind the four major ASX banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).
While it's focused on in-store payments, it recently expanded into e-commerce. For merchants, it provides point of sales systems, least-cost routing and alternative payment types such as Alipay.
The ASX payment share is currently rated as a buy by the broker Morgan Stanley with a price target of $4.60.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a business that specialises in providing donation technology and management services for churches.
There was a large adoption of digital donations in 2020 because of the COVID-19 pandemic. Pushpay said that it has become evident across the sector that the market has undergone a transformative shift. The company also said that digital solutions will play a crucial role in the future of the church. It has not seen a meaningful proportion of digital giving revert to non-digital means.
In FY21, Pushpay saw total processing volume increase by 39% to US$6.9 billion. This drove revenue higher by 40% to US$179.1 million and net profit went up by 95% to US$58.9 million.
The ASX payments share continues to expect strong revenue growth as it continues to execute on its strategy to grow market share through continued innovation of products, acquisitions and expansion into the Catholic market.
Pushpay believes that it has an "exciting future".
