Following robust growth of the global payments industry in 2023, we remain positive on this space amid long-term drivers. The growth in cross-border volume is expected to outpace domestic payment volume, and this is primarily driven by resilience in travel and tourism, as well as booming e-commerce transactions.
Payment players are diversifying their revenue mix towards value-added services (VAS), which is expected to grow at a faster pace compared to payment services.We expect companies with higher VAS mix to deliver low-teens y/y growth in revenue for FY24F and outperform peers with high single-digit revenue growth.
We prefer payments names that possess:
1) Global presence which enables them to ride on the digitalisation and e-commerce trends,
2) Higher revenue mix towards VAS, and
3) Lower sensitivity to economic downcycles
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