PayPal Holdings, Inc. (PYPL) acts as a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Its payment solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and iZettle products. On the other hand, Payments technology company Visa Inc. (V) facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network.
The credit services industry suffered because of the near-zero interest rate environment and lower consumer spending amid the pandemic. However, the sector has witnessed a solid recovery from increased credit transactions and rapid technological innovation. Also, the Federal Reserve approved a 0.25 percentage point rate hike, the first increase in more than three years. And the robust March jobs growth might give the Federal Reserve the green light to get more aggressive with its interest rate hikes to drive down inflation, which should help the credit services companies generate solid revenues. Therefore, both PYPL and V should benefit.
