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The New Era of Financial Transactions

Last Sunday the New York Times published an article In Urban China, Cash is Rapidly Becoming Obsolete and described how “almost everyone in major Chinese cities is using a smartphone to pay for just about everything.” China’s two main smartphone payment options are WeChat by TenCent (TCEHY) and Alipay by Alibaba (BABA).

Outside China, another payment option is taking the world by storm. Venmo is a phone app that lets you make and share payments with friends for free (such as pay for dinner). Venmo is owned by PayPal (PYPL).

Traditional credit card processors are also doing well, with Visa (V) and MasterCard (MA) being the most well known. But Global Payments (GPN) might be the fastest growing yet least known of this bunch.

Within financial stocks, the growth opportunity isn’t in banks — it’s in the processors. Let’s take a closer look.

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