Daily Market News - 23rd Nov 2021

The Great Payment Processing Disruption?

OK, let’s just get it out there.

Payment processing companies are being disrupted. I’ve been banging the drum on this for 6weeks now and received a million messages/emails on the subject, so while I can’t reply to everyone, I hope this weeks newsletter gives a little more clarity.

Some incredible companies which have been staples of many portfolios for the last few years (and done well for many) are now showing signs of real weakness (they’re now in down trends).

I know….. It’s incredibly easy to make the case that Paypal, Visa and Mastercard are offering the perceived “discount”, but I’d like to share some charts with everyone to show what I’m seeing at this exact moment in time, and where I hope to see buyers step in.

I learned a while ago that picking bottoms blindly can be hazardous to your wealth, but there are some key levels to watch.

Mobile Payments ETF (IPAY)

As the chart shows. The writing was on the wall as early as September. We failed to break out to new all time highs.

Around that time, Twitter announced a partnership with Strike (not to be confused with Stripe) to integrate no cost transactions over Twitter using something called the Bitcoin Lightning Network (I didn’t even know Bitcoin had this capability at the time).

Jack Mallers (Strike CEO) taken a trip onto the Financial media circuit saying words like “disruption”, “they’re fucked” (his words, not mine) and “game changer”… payment processing companies since then have been in freefall ever since.

It’s the little details many miss. I don’t expect everyone of you reading this to be aware, but it’s a classic case of Fundamentals perfectly aligning with the Technicals.

For many holding, it’s not been a pretty couple of months.

That said, the big boys aren’t going anywhere. I think they’ll adapt.

Low/No cost transactions aren’t going away and with Stripe (not to be confused with Strike) recently announcing they’re building out a Crypto team, it tells me the Bitcoin Lightning Network is here to stay, and businesses (like my own) are just not gonna accept paying 10s of thousands of dollars a year in fees when we can transact for free elsewhere.

It truly is a game changer. As I said. This is what disruption looks like.

Visa (V)

Paypal (PYPL)

The market is telling us what’s happening with Payment Processing Companies. You just need to know where to listen and what price is telling us.
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