Ted Bauman’s latest reminder to his followers is that cash is no longer king. In a Banyan Hill Publishing newsletter, the subject was covered with some useful advice. The letter started with a challenge for readers to recall the last time they used cash for a transaction. For many, this would have been months or perhaps even years ago. And for those, many of those transactions used cash only in an attempt to get rid of some they had lying around or because a small local business or food stand accepted cash only. Even then, most small businesses can now accept cards with options like PayPal and Stripe.
Although some people still use cash for a few small purchases, they make most transactions with plastic cards or through apps and auto-pay features on websites. Cash was a popular payment method for gas and retail goods in the past. Since people must prepay for fuel at nearly any gas station now, they typically use credit or debit cards to pay instead of cash. So what is the purpose in hanging onto cash? And an even better question, where is the future headed when it comes to how payments are processed in an increasingly digital world? Investment opportunities abound in this growing industry and market.
People also use cards in retail stores more often. According to research from the Federal Reserve in 2016, about 35 percent of transactions were made with cash. However, the majority of those cash purchases were for amounts under $25. That means that whenever people are still using cash, they’re using it for very small purchases—leading to cash spending accounting for less and less of the total pie over time.
Changing Cash Trends
With the shift toward cashless payments, the $100 bill became America’s most popular type of circulated currency. However, this does not mean that people are spending more cash today. Most people have watched cashiers hold up $100 bills and examine them carefully to verify their authenticity, and this experience can be embarrassing to some people. The majority of $100 bills that are being handled and exchanged are being used for savings. In the Banyan Hill letter, the author referenced Ted Bauman’s Smart Money portfolio for better options than saving cash at home or in a bank account.
For some time, cash savings were enjoyed by some individuals and families because it made their money tangible and real to them, with the hope that it would discourage them from giving it away. But nowadays there is a wide range of digital tools designed to help people save and budget their money more effectively, so cash savings are no longer necessary.
Ted Bauman provides some creative ways for investors to take advantage of the shift toward digital payments. His expertise comes from over 25 years of experience working in the nonprofit sector with housing and finance. He attended college in South Africa, earned two degrees and spent several years there in roles that let him help people attain housing in impoverished areas. His experience in the financial sector has spanned many major shifts in how payments are made and received, and he’s learned a great deal from being on the front lines of the constantly changing and evolving financial industry. He’s been sharing his expertise with subscribers through his personal advisory newsletter for some time.
Additionally, he spent time as a consultant for financial and home planning issues, which vastly broadened his knowledge. At that time, he worked with multiple agencies and organizations including the United Nations, prestigious European grant providers and South Africa’s government. Ted worked in a leadership position with Habitat for Humanity in the late 2000s before he became an adviser and an investment newsletter author. That time with Habitat for Humanity gave him a unique perspective on the way that global shifts have a real effect on communities around the world, and how smart investments by people, governments, and private organizations can lead to an increase in the quality of life for people everywhere.
Investors Can Benefit From The Cashless Payment Shift
The Banyan Hill letter warned readers to avoid navigating toward companies such as Discover and Visa. In the future, credit card companies may not be the most lucrative options with newer cashless payment platforms emerging every year. Although Google Wallet and Apple Pay are popular, there are better cashless payment companies for investors. Ted Bauman recommends PayPal as the most lucrative investment opportunity. Why? Because of a wide range of benefits offered by this giant in the world of online payments. He recommends considering them because of their rich history of success in the market, and the way they’ve been able to adapt and grow along the way.
But first, it’s important to learn a little bit about the history of PayPal and how it came to redefine the online payment industry and market.
In the beginning, PayPal was known as Confinity. It originally developed software designed to increase the security of mobile devices like Palm Pilots. From there, PayPal was developed to provide a safe and secure way to transfer money over the internet. By 2002, the company had gone public and generated over $60 million.
PayPal was soon acquired by eBay, and they began to use PayPal as their primary source for managing payments online. Before that point, eBay auctions ended in a complicated series of transactions that involved mailed checks and other inconvenient and unsecured methods. PayPal allowed for bidders and sellers to ensure that they would receive the product or money they were owed without worrying about beign scammed. From there, PayPal expanded to become one of the world’s most successful sources of secure online payments. And it has since changed the game when it comes to how the world sees digital currencies.
In many ways, experts see PayPal as the vanguard which paved the way for digital currencies like Bitcoin and Litecoin. Without PayPal creating a level of cultural comfort with money existing in the cloud, there never could have been the space for cryptocurrency to exist or be widely accepted by the public at large.
By 2010, PayPal boasted an active user count of over 100 million across 200 markets with 25 currencies accepted across nations and borders.
On the New York Stock Exchange, PayPal is classified as PYPL. It is one of the pioneering companies of cashless online payments. In the past, it was exclusively used for eBay payments. The company’s design protected both merchants and buyers on the popular online auction site. They quickly realized, however, that this added security could be useful in all online payments across multiple industries, improving their value throughout the market.
Today, it has grown into a global company that is used for everything from sending personal gifts to paying independent contractors. PayPal became an independent company and separated from eBay in 2015. It now has more than 244 million users around the world, which makes it the leader of the online payment market. They also enjoy the benefit of being more valuable the more users they have, as the ability to share payments with peers on PayPal has become one of their greatest values for users. The more of your friends that have a PayPal account, the better it is for you. This has led to exponential growth for PayPal and impressive valuations in recent years.
In a 2017 Statista report about preferred online payment platforms, almost 40 percent of respondents in a survey said that they preferred PayPal over other platforms. A little more than 40 percent of the respondents said that they preferred credit cards. Recently, PayPal also launched its own credit card option with the cooperation of Mastercard. Every day, their hold on the market grows more powerful—even as they adapt and move into new markets, with a series of shrewd acquisitions of companies like Zong, Simility, Hyperwallet, Swift Financial, and Xoom Corporation.
The Strength Of PayPal
Venmo is another popular online payment app that PayPal owns. With this app, people can quickly transfer cash to other users. It is especially popular with younger people. For example, if a group of friends are all pitching in to pay for food delivery but a few of them do not have cash, they can use the app to send money to the person who is paying for the order. One of Venmo’s biggest competitors is Square, which held a slight lead in download volume recently. However, Venmo still boasted $18 billion in processed payments during its first quarter this year. This is adding even more success for PayPal, as Venmo has grown from third quarter earnings in 2015 of $1.3B to over $9B in quarter three of 2017. That 900% growth over just two years is astounding, and is due in large part to PayPal’s successful management.
Since the cashless payment marketplace is enormous, there is plenty of room for more competitors. PayPal is making it clear that it plans to maintain a leading role. Recently, the company released its PayPal Here feature. It is a point-of-sale app that lets people accept payments through the popular site anywhere, and the design is similar to Square’s app that allows such payments. With a PayPal credit card reader and the smartphone app, anyone can process payments instantly. Since PayPal separated from eBay, its revenue grew by an astounding 20 percent. Also, 2018 has been an excellent year for PayPal with optimal growth in each quarter so far.
Meanwhile, the culture at large becomes more and more comfortable with cashless payments and making payments online. That will only lead to increased users and greater profits for companies like PayPal and their other competitors around the world.
Ted Bauman’s Investing Advice
Ted Bauman encourages investors to buy stock in PayPal right now. Shares went up by more than 20 percent since their low point in May. With a good 50-day moving average, PayPal saw solid price support. PayPal is still in the rebound phase, which means that it is a good choice for bargain investors. The 14-day Relative Strength Index for PayPal is more than 50 percent and is on an upward trend. For investors, this means that the stock is not overbought and that momentum is growing. This is the perfect time for shrewd investors to get in during the rebound and experience impressive returns, without having to invest an arm and a leg to get them. That’s why Bauman advises taking steps now, rather than later.
However, there may be turbulence in the $95 region according to Banyan Hill’s research. Ted predicts a complete recovery for the stock pick with the holiday shopping season approaching. The time to invest is now, before that rebound happens and prices per share become too high for investing once again.
Investors who want to follow Ted Bauman’s top picks can subscribe to one or more of his newsletters. He authors Plan B Club, Alpha Stock Alert and The Bauman Letter. Readers can also keep up with limited free advice from Ted Bauman on Banyan Hill’s main site. Ted joined Banyan Hill Publishing in 2013 and has helped many average Americans make smarter investments. Through his multiple newsletters, Ted offers a wide range of financial advice and investing expertise to help everyday people transform their lives with smart investments. He also provides unique perspectives on companies that might be undervalued or misunderstood, allowing smart investors to earn solid returns from unexpected places.
In addition to currencies and payment systems, Ted offers advice about investments that relate to finance and the housing market. He draws on his decades of experience in these markets, as well as his up-to-date research centered around staying on top of the constantly evolving housing and finance markets.
What Do Other Investment Advisers Say?
Ted encourages investors to do their own research about companies and related economic factors when they make decisions. Some other investing experts are recommending PayPal as a good cashless payment platform for investors. They recognize much of the same that Ted does—PayPal is on the path upward, and now is the time to get in early and earn some impressive returns.
However, several advisers are also recommending other companies such as Visa, Mastercard and credit card providers. Square is recommended by some, and several advisers recommend payment platforms such as Apple and Google. Fiserv and Alibaba are also on some lists of recommendations. However, many of these companies don’t add the same value as an investment as PayPal. This is for a long list of complex reasons, which are beyond the scope of this article alone. However, there is an option for those who would like to learn more on a deeper level.
Investors can learn more about why Ted Bauman recommends PayPal over other cashless systems in his newsletters, with subscriptions available through Banyan Hill Publishing online. When Ted provides advice for his subscribers, he also backs it with research. He doesn’t believe in simply going ‘from the gut,’ but rather using his expertise combined with current research and data to make smart recommendations.
As it is with the other investing experts at Banyan Hill, Ted Bauman was selected as an editor of The Bauman Letter because of his comprehensive research abilities, his vast knowledge and his proven track record of successful investing. Ted does not base his picks on popular investment news sources alone. He knows how to gather other important pieces of information to accurately predict trends and the performance aspects of companies in his markets of expertise.
Keep Reading: Here’s How The Bull Market Dies