“VeriFone Systems, Inc. (PAY 46.03 NYSE) provides retail electronic payment devices that process debit and credit cards. Next time you’re at a gas station or department store, take a look at the machine that reads your card. With 20 million locations globally, chances are that machine was provided by VeriFone. But VeriFone does more than put their name on the machine. VeriFone produces the systems, software, and services that enable the acceptance and processing of electronic payments for goods and services. In other words, your credit card would be as worthless as a used envelope without them.
“As the world transfers its payment method away from cash and check and toward debit and credit cards, VeriFone will be there to provide the infrastructure for the payment systems. Though growth in the U.S. is saturated, electronic payment systems are just beginning to gain ground around the world, as processing costs decline and card availability increases.
“Another key driver for VeriFone over the next few years is payment by mobile systems. These mobile systems are designed to increase security and decrease the time it takes to complete transactions. In November 2010, the three largest U.S. mobile network operators—AT&T, Verizon and T-Mobile— announced a joint venture branded ‘Isis.’ When the three biggest mobile carriers see an opportunity, you should too. The stated goal of Isis is ‘to build a nationwide mobile commerce network utilizing smart phone and near-field communication technology.’ ... In addition to the opportunity presented by Isis, VeriFone’s strategic relationship with Google will also bring success from the growth in mobile business and with near-field communication (NFC). Google Wallet was introduced last year and has been adapted by 40,000 retail sites across the country. Instead of using a traditional card that ‘swipes,’ consumers use smart phones to pay. NFC is the payment method likely to take hold in the future. [Near-term,] the biggest driver for growth this year is EMV smart card adoption. ...
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Ian Wyatt, Top Stock Insights, February 10, 2012
