We recently published a list of 11 Best Digital Payments Stocks to Buy According to Analysts. In this article, we are going to take a look at where Shopify Inc. (NASDAQ:SHOP) stands against other best digital payment stocks.
Digital payment stocks are companies that specialize in designing, developing, or administering digital payment solutions. These firms use technology to enable electronic transactions between individuals, businesses, and institutions. Businesses that provide services such as online payment gateways, mobile payment apps, and peer-to-peer payment platforms can all be considered digital payment stocks. These technologies include digital wallets, payment processing systems, and blockchain-based payment solutions.
The global digital payment market is booming. According to Grand View Research’s report, the global digital payment market is anticipated to reach $96.07 billion in 2023, with a compound annual growth rate (CAGR) of 21.1% between 2024 and 2030. In terms of solution insights, payment processing led the market with 26.18% of worldwide revenue in 2023. North America dominated the market, accounting for 33.9% of total revenue in 2023. Europe is projected to see a substantial CAGR between 2024 and 2030.
Meanwhile, according to Marqueta’s 2024 State of Payments Report, 46% of survey respondents in the USA reported using some type of contactless payment during the last seven days. This is in contrast with 80% in the United Kingdom and 69% in Australia. Emerging technologies such as cryptocurrencies and the metaverse aim to drive payment innovation and borderless payment choices for customers.
As per McKinskey‘s survey, in 2024, around 90% of consumers in both the US and Europe said they made at least one digital payment in the past year, with usage in the US hitting a record 92%. The survey defines digital payments as transactions completed online—through websites or apps—or in physical stores using dedicated apps like digital wallets. In-app and in-store payments contributed to this expansion, with digital wallet usage for in-store transactions rising from 19% in 2019 to 28% in 2024. This expansion reveals a $10 trillion annual market for both regions. Notably, 20% of digital wallet users in the country occasionally leave home without their traditional wallets, underlining the trend toward digital-first transactions.
There is also a difference in customer preferences between the US and Europe. European users prefer to choose local solutions like iDEAL in the Netherlands or Swish in Sweden, whereas US consumers prefer retailer apps. In America, younger consumers are especially attracted to “Buy Now, Pay Later” marketplaces, spending 1.5 to 2 times more than those who start on merchant websites. Rewards and offers are increasingly influencing payment decisions, with 25% of U.S. consumers citing rewards as a significant factor. This shows the increasing importance of digital wallets in everyday transactions. It opens up chances for payment providers to improve omnichannel loyalty programs and extend retail platforms. Furthermore, A2A payment formats may expand, particularly in the United States, where regulatory improvements could lower merchant costs.
Looking forward, Deloitte’s 2025 payment industry insights outlook revealed that consumers are turning to digital payments, with check transactions dropping as large stores adopt a “check zero” strategy to reduce costs and fraud concerns. Global e-commerce sales are expected to reach $6.3 trillion by 2024, fueling the growing use of credit cards, debit cards, and peer-to-peer payments. P2P app usage has gone up by 12% since 2021, but cash and check P2P payments have dropped. Digital payments are becoming more popular in B2B due to cost savings and technological developments, but checks continue to play an important role.
An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels.
Our Methodology
For this article, we first screened for companies that have operations in digital payments. Then, we identified stocks with positive analyst coverage and upside potential. Finally, from that group, we selected the 11 stocks that had the highest upside potential as of April 9, 2025. We have only included stocks in our list with an upside potential of 35% or higher. The stocks are ranked in ascending order of the upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Shopify Inc. (NASDAQ:SHOP)
Analysts’ Upside Potential as of April 9: 51.39%
Shopify Inc. (NASDAQ:SHOP) is ranked seventh on our list of the Best Digital Money Stocks. Shopify Payments is the payment platform operated by the Canadian e-commerce company. This makes it possible for Shopify store owners to accept payments online without relying on third-party services.
The firm’s moat is strengthened by its extensive platform and loyal customer base. Its size allows for aggressive investment in product development, which strengthens its lead in functionality and tooling. Its 8,000+ app ecosystem, combined with a rapidly growing B2B market (with six straight quarters of 100%+ GMV growth), generates a network effect that keeps merchants locked in. Up to 90% of customers stick with the company because switching is expensive, especially for larger retailers who depend on its payment, inventory, and logistical services. Shopify Payments currently accounts for 64% of total GMV, with Shop Pay continuing to beat competitors in terms of conversion. Even as competition heats up, Shopify Inc. (NASDAQ:SHOP) becomes increasingly tough to displace due to these embedded technologies.
The company’s financial performance remains strong. Q4 of 2024 sales climbed 31% YOY, primarily due to a 33% growth in its Merchant Solutions division, which now accounts for 76% of overall revenue. Gross Payments Volume soared 35% to $61 billion, showing the company’s growing importance in transaction processing. Shopify Inc. (NASDAQ:SHOP)’s Subscription Solutions segment, which generates high-margin recurring income, jumped 27% year on year and currently accounts for 24% of overall revenue. Although the segment’s gross margin fell slightly to 79.9% due to mixed and short-term challenges from the transition to three-month free trials, this strategic decision is projected to boost merchant stickiness and long-term GMV capture. The Monthly Recurring Revenue shot up by 24% in Q4, with broad-based growth across basic, Plus, and offline levels, highlighting the strength of its client base and revenue sources.
Overall, SHOP ranks 7th among the 11 Best Digital Payments Stocks to Buy According to Analysts. While we acknowledge the potential of digital payment companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.”
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Disclosure: None. This article is originally published at Insider Monkey.