The Square-Afterpay deal excites locals, but this will be short-lived as the reach and size of PayPal continues to grow, according to Insync’s John Lobb.
“It’s an achievement for a local company to join a global payments group like Square but they are still at the smaller end of the payments/BNPL universe. Size does matter and reach is paramount for merchants who want to offer a range of payment providers but must nearly always include bigger players like PayPal,” said John Lobb, portfolio manager at Insync Funds Management.
PayPal wins for merchants and many purchasers because:
PayPal has 396 million customers
PayPal processes approximately 60% of all online retail spending (ex-China)
PayPal thrives without late fee income unlike most competitors
PayPal is already indirectly in the Chinese market via Go Pay and Shanghai-based Union Pay with potential to reach 500 million Chinese shoppers
Information Technology Resources - PayPal launched its BNPL response far quicker than any smaller player could imagine
“Merchants don’t want a window full of logo stickers for payment providers and Millennials are too savvy to have a phone full of BNPL apps. They want proven providers when managing their money and money transfers,” said John Lobb.
Other Global Tech stocks/themes that John Lobb can comment on include: NVDIA, Amazon, VISA, Apple Pay, Nintendo, Hydrogen, and Low Emission energy.
Disruptions stocks can provide investment returns now
Insync’s investment strategy concentrates on disruption and its interrelationship with a global Megatrend rather than just investing in disruptive companies.
“Our investment philosophy revolves around high quality companies. We look for companies that are benefiting from disruption, have long runways of growth through exposure to global Megatrends and are highly profitable,” commented Mr. Lobb.