Two Companies Profiting From the Surging Mobile Payment Trend
On Friday, I stated that mobile payment technology is set for a big year in 2012, as the fast-growing trend continues to catch on.
I revealed the two major contenders in the NFC platform-making field and, as promised, I’m now going to reveal the two companies best positioned to profit, as NFC increases its presence.
~ NFC Play #1: NXP Semiconductors (Nasdaq: NXPI)
What better way to make a mint on NFC than by investing in the source?
I’m talking about NXP Semiconductors – the company that essentially invented the technology.
I’ve alerted readers to NXP’s potential a few times already, but in short…
NXP has a distinct first-mover advantage here, as it supplied the chip for the first NFC phone that made it to the U.S. market. And it’s using that to make strides in the market. The company recently partnered with Sony (NYSE: SNE) and Microsoft (Nasdaq: MSFT) and is an official partner of Google’s Wallet initiative, too. There’s little doubt that NXP will be the source of many more NFC-enabled phones to come.
~ NFC Play #2: VeriFone (NYSE: PAY)
VeriFone manufactures the payment terminals that allow NFC technology to work, so it’s also uniquely positioned to benefit from NFC’s rise.
Like NXP, VeriFone is an official Google Wallet partner. And as I’ve written before, it recently acquired mobile payments startup, GlobalBay. So it’s obvious that the company is honing in on the space.
But from what VeriFone’s Vice President of Product Marketing and Integrated Systems, Erik Vlugt, told Wall Street Daily this week, the company isn’t just prepping for the coming NFC blitz… it’s poised to own the space entirely.
You see, while NFC hit our radar in early 2011, VeriFone realized the importance of the emerging technology years ago. And it’s been solidifying its eventual dominance in the industry ever since.
As Vlugt says, “Several years back… VeriFone already saw the opportunities NFC mobile commerce would bring and started working and investing heavily in solutions to enable rich NFC mobile commerce at merchants… That has guaranteed VeriFone’s leadership in everything regarding NFC.”
And now that the technology is beginning to make headlines and attract attention from consumers, Vlugt says the company plans to strengthen and expand its leading position in the market from here.
Here’s the best part, though…
While VeriFone has partnered with Google, its technology isn’t just limited to the Google Wallet application. It works with all of them.
According to Vlugt, “VeriFone is working with all major NFC mobile payment leaders and plans to enable… any consumer NFC app or wallet that [merchants] would want to support in their systems.”
Needless to say, with multiple players already in the mobile payments race – and several more likely to join the fray next year – this is as close as you can get to a silver bullet in the NFC industry.
The company has seen a big revenue spike, too, climbing 51% in 2011. And although Vlugt didn’t specify how much of that came from its NFC push, it’s pretty clear that VeriFone’s vice-like grip on this burgeoning market has a lot to do with it.
And as more consumers adopt NFC-enabled phones – and retailers update their systems to capture the trend – VeriFone’s revenue should continue to surge next year.