Ayden’s Shares Surge
Ayden, (ADYEN:NA) a Dutch payments company, has seen demand for its services surge as a result of the ecommerce boom. Shares of Ayden have climbed almost 120% this year, making it the best-performing large stock in Europe in 2020.
The company’s market value has reached almost $60 billion—higher than many of Europe’s large banks, including USB Group AG (USB). Ayden also outperformed other digital payment companies which have seen growth during the pandemic, like PayPal (PYPL).
The Technology Powering Digital Payments
Ayden builds the technology that companies use to process credit card and other digital payment methods. Big names like Uber (UBER), eBay (EBAY), Microsoft (MSFT), and others use the company’s payment processing tools. The company is less flashy and consumer-facing than digital payment systems like PayPal and Venmo, but it is an important part of the growing digital payments landscape.
About 90% of Ayden’s business comes from transactions that happen online as opposed to in a store. This has made the company attractive to investors who have watched ecommerce gain popularity during the pandemic and believe that many consumers will stick to their online shopping habits even after the pandemic.
Cash Payments Are Down
Positive news from vaccine makers has caused Ayden’s shares to dip slightly as investors contemplate how a return to normalcy would impact consumer habits. However many believe that Ayden is well-positioned for growth regardless of how a vaccine impacts the economy.
Even if and when consumers return to doing more in-person shopping, they are likely to use digital payment systems more than they did pre-pandemic. In 2019, an estimated 69% of all global transactions were done in cash. This year, that number is expected to be about 64%. That drop is four or five times higher than the shift from cash payments to digital payments seen in a normal year. Analysts expect more ecommerce and less cash payments at brick-and-mortar stores even after the pandemic, which are both good for Ayden.
The company reported a 27% jump in revenue during the first half of 2020. Investors are eager to see how Ayden will perform during the holiday shopping season and beyond.
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