(List compiled by Andrew Dominguez. Disclosure: The author owns MA and AAPL stocks.)
Smartphones have made many things obsolete: rolodexes, pocket planners, physical calendars, maps, landline telephones, beepers, to name a few. Could wallets be next on the chopping block?
Indeed, a number of companies are trying to make wallet-free life a reality, according to Matt Marshall of VentureBeat.
eBay owns PayPal, which provides secure online payment and money transfer by linking email addresses to bank accounts. Zong, on the other hand, links payments to the users’ mobile phone numbers.
Many large firms and hot startups have entered the race to develop the next generation payment system. One of the most prominent new technologies is Near Field Communications, or NFC, which allows people to pay using their NFC chip-enabled credit card or mobile phone instead of having to “tediously” swipe credit cards.
This technology has been around for several years now and may soon be ubiquitous – it is currently being backed by payment giant VeriFone (PAY) and the large credit card companies Visa (V), MasterCard (MA), American Express (AXP), and Discover (DFS).
The objective of next generation payment isn’t merely wireless payments – as cool as it is, it is not a drastic improvement to the shopping experience. The goal is to integrate the physical shopping experience with the internet.
A prime example of the bankability of this melding of the physical and digital worlds is Groupon, the soon-to-be IPO coupon website. After only a few years in business, the company could be valued at over $20bn. A host of competitors have cropped up in recent years, including Gilt City, Living Social, Facebook Deals, and Google Offers.
Google hopes to make its Android smartphone software, the most popular smartphone platform in the US, the jumping point for digital and physical commerce. Its payment software, called Google Wallet, will allow users to link credit card accounts to smartphones. Google Offers will use Android location services to alert users to nearby deals.
eBay’s PayPal already has a popular mobile app, as do Groupon, Living Social, and many other payment services.
Mobile telecom providers and phone manufacturers will also likely try to get a slice of the billions of dollars to be had from this next wave of innovation, although Marshall of VentureBeat notes that they have lost some bargaining power in recent years.
To help you begin your own research, here is a list of public companies that are leading the innovations in mobile payment technology.
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List sorted alphabetically.
1. American Express Company (AXP): Mortgage Investment industry with a market cap of $62.84B.
2. Apple Inc. (AAPL): Personal Computers industry with a market cap of $327.36B.
3. AT&T, Inc. (T): Domestic Telecom Services industry with a market cap of $182.4B.
4. Discover Financial Services (DFS): Credit Services industry with a market cap of $14.57B.
5. eBay Inc. (EBAY): catalogue & Mail Order Houses industry with a market cap of $42.71B.
6. Google Inc. (GOOG): Internet Information Providers industry with a market cap of $169.92B.
7. Mastercard Incorporated (MA): Business Services industry with a market cap of $37.1B.
8. Motorola Mobility Holdings, Inc. (MMI): Diversified Communication Services industry with a market cap of $6.21B.
9. Nokia Corporation (NOK): Communication Equipment industry with a market cap of $22.76B.
10. Sprint Nextel Corp. (S): Wireless Communications industry with a market cap of $16.22B.
11. VeriFone Systems, Inc (PAY): Business Equipment industry with a market cap of $3.92B.
12. Verizon Communications Inc. (VZ): Domestic Telecom Services industry with a market cap of $105.02B.
13. Visa, Inc. (V): Business Services industry with a market cap of $72.96B.
Interactive Chart: Press Play to see how analyst ratings have changed for all the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.