Visa – own the credit card payment network for essentially the whole world, taking a cut of all the transactions that run through them. They’re well-established now, so don’t expect much growth here, and it unfortunately tends to trade at very expensive levels.
PayPal – own the payment processing for much of the world’s online shopping. They’re on every website, and they’ve got nearly 300million users worldwide. They simply process payments safely and take a cut of all the transactions that run through them. Despite being around for a while, it still has plenty of room left to run considering that only 20% of all goods are purchased online, meaning it has 5-fold potential to grow their sales from here. They also own the popular peer-to-peer payments app Venmo.
Square – started out selling little devices to turn smartphones into card processing terminals, and now they’re doing much bigger things. Their current main line of business is in selling their devices which allow small businesses to accept card payments without the hefty fees associated with bank providers. They sell their device, and then they take a cut of all the payments processed by the device. The stock soared in 2020 because of the growth in their peer-to-peer payments app called Cash App, a competitor of Venmo. The goal here is to slowly transform themselves into the bank of choice for consumers, the same long-term goal of PayPal. You can read ARK invest’s article explaining how Square is trying to do this in more detail. The stock is well-expensive.