How many apps do you have on your smartphone?
If you’re like me, it’s a lot.
There’s Spotify for music… and your banking app.
Uber for calling a cab… and WhatsApp for sending messages.
I bet you click on at least a dozen apps each day.
But imagine ordering pizza, paying bills, booking flights, and listening to music…
All inside one single app?
Well, you don’t have to imagine… because this “Super App” exists today—in China. And it’s helped turn the company that created it into one of China’s most dominant businesses.
I’ll show you how in a second.
More importantly, I’ll share the two stocks racing to create America’s first Super App… both are strong buys today.
Meet the one app to rule them all.
Serial entrepreneur Jack Ma founded Ant Financial in 2014 to take the hassle out of online payments.
Today, Ant is worth over $300 billion… thanks largely to its Super App that dominates everyday Chinese life.
Paying bills… ordering groceries… booking a vacation… shopping for clothes… and buying stocks. These are five distinct tasks. And you must open four or five separate websites, or apps, to do them.
Ant Financial has squeezed all these tasks… and hundreds more… into one easy-to-use app.
It’s called “Alipay.” Modern Chinese life revolves around it now.
Over 1.3 billion people use Alipay each month. And get this… $17 trillion+ in payments flowed through the app last year.
In fact, Alipay has totally disrupted credit cards in China. Visit Beijing or Shanghai and you’ll find most folks paying for stuff with their phones through Super Apps like Alipay. Try to pay by card and you’ll be left waiting while the shopkeeper tries to dig out a dusty card reader.
Thanks to its Super App, Alipay has ballooned into China’s largest investing platform. Alipay users have invested trillions of dollars through the app. In fact, assets in Invesco’s money market funds surged 175X during the first 18 months of listing on Alipay.
Are you ready for America’s first Super App?
Today, Super Apps only exist in a handful of Asian countries.
But two top disruptors are racing to build one for America.
Longtime RiskHedge readers know PayPal (PYPL) is one of our favorite stocks. Its “checkout button” will process a record $1 trillion in payments this year.
Now PayPal is transforming into a Super App. On its latest earnings call, CEO Dan Schulman announced the new service will launch in the coming months.
You’ll be able to seamlessly buy groceries… cash checks… open a bank account… pay bills… buy Bitcoin… wire money… earn rewards… donate to charity and even chat with friends—all through one app.
And get this… Schulman is targeting “half a billion to one billion people, minimum.”
If PayPal pulls it off, it will become the operating system for everyday life. You’ll be using it at the checkout till, to pay monthly bills, and to send money to friends.
But PayPal’s top rival has Super App ambitions too…
Square (SQ) started as a payment solution for mom and pop stores.
I’m sure you’ve seen its white “card reader” that plugs into any headphone jack. This genius invention instantly transforms any smartphone or tablet into a card reader.
Today, its largest and fastest-growing business is helping ordinary Americans spend… save… and invest their money. More than 40 million people now use Square’s Cash App at least once a month. That’s roughly one in eight Americans.
The smartphone app began as a quick and easy way to transfer money. But it’s fast evolving into a one-stop shop for your whole financial life.
For example, Cash App’s “Direct Deposit” feature allows employees to access their wages as soon as their shift has ended. That’s right: If you work for a business using Square’s payment solutions, you don’t have to wait for a paycheck anymore. You get paid every day.
It even lets you grab your tax refund up to two days early. How cool is that?
You can buy stocks… get a business loan… and save money in your Cash App account. Now you can even buy coffee and tip through the app. And it continues to add new features at breakneck speed.
Sounds cool Stephen… now how do I make money?
You likely know PayPal and Square have been two of America’s best performing disruptors.
PayPal has handed investors 600%+ gains over the past five years:
Square has surged 23x since 2016:
PayPal and Square have achieved these gains by breaking banks’ stranglehold on money.
In short, you used to need a regular bank account to do pretty much anything related to money. You needed one to cash a government stimulus check… receive social security… or pay taxes. Now you can use PayPal’s app to do all three.
Disrupting money is only the beginning for PayPal and Square.
Remember, China’s Alipay started as a way to easily checkout online. Now over a billion people use it to book flights… pay for meals… buy cars and pay their mortgage each month. It transformed Ant Financial from internet minnow into one of China’s most valuable companies.
With the launch of their Super Apps, PayPal and Square are following the same path.
Folks will soon use PayPal and Square to pay bills and buy stocks. In five years, I bet you’ll be able to buy a car, book flights, and get a loan through their apps.
PayPal and Square have been on a tear over the past few years, but they’re only getting warmed up. Their Super App launches will fuel years of rapid growth.
So—who will win the Super App race? At this point, I don’t think it matters. We’re in the early days with roughly 300 million customers up for grabs in America alone. There’s plenty of growth available for both stocks to soar many multiples from here.
PayPal and Square are two stocks disruption investors should bet on for the next five years.
Originally published by Mauldin Economics, 8/9/21