December 22, 2014
Why 2015 Could Mark The End Of Cash
By Christian Hudspeth
Quick, what's in your wallet right now?
My guess is you have some family pictures, a few credit cards and maybe some
old business receipts. If you're more old fashioned like I am, you might hold
a few greenbacks in there as well... just in case.
Why am I asking? Because I predict that within the next five to ten years you
won't need a wallet.
Simply put, I predict a small technology company is going to make all material
forms of currency obsolete. And it's going to do so with help from
technology juggernauts like Apple and Google.
If that sounds crazy, then consider this. It took a few thousand years to go from
coins to paper money and then onto charge cards. It took 18 years for debit
cards to surpass checks. Four years after that, more than 50% of all
transactions were electronic.
This year, nearly two-out-of-three transactions (64%) will be made
While many of those transactions will be online, a large portion will come
from something called near field communication (NFC) -- a relatively new
technology that's getting widespread attention across the globe.
Near field communication essentially lets certain
devices "talk" to cash registers and other point-of-sale terminals using a
short-distance radio frequency transmitter.
With NFC, all you have to do at the register is tap the reader with your
smartphone and out you go with your goods. It's as simple as that.
I'ts only a matter of time before this convenient payment method becomes the norm. Reuters projects the number of phones with NFC chips will double to 550 million phones this year from 300 million last year.
StreetAuthority's small-cap stock expert, Andy Obermueller, has been following
this "cash killing" NFC technology for several years now. Here's what he said
about NFC when he first told readers about it back in his July 2012 issue of
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"It's not often that the future lands in my in-box.|
But it did last week. Google sent me an update on its new Wallet initiative.
The Google Wallet is a new way to pay. It uses a special chip in certain
smartphones to transmit your credit card information to a reader that more and
more point-of-sale terminals are equipped with. There is no physical exchange
of the card and thus no chance of the number falling into the wrong hands.
It's also going to open up mobile payments to a whole new audience, notably
among young people and a portion of the population that doesn't use banks.
That's because not only is the credit card in Google Wallet available as a
prepaid card -- no credit required -- it is also available on a prepaid
smartphone through VirginMobile. This will certainly help push this technology
into the mainstream..."
The investment possibilities with NFC payments are endless.
As Andy mentioned, Google is heavily invested in this technology through its
Google Wallet software. Financial firms Citi, Visa,
Mastercard and eventually American Express will
administer the electronic payments that Google Wallet and other payment apps
use. Verifone Systems, as its ticker symbol suggests, makes the
cash-register readers for the smartphone NFC chips.
All of these large companies will likely receive healthy new revenue streams
out of the deal. All of which makes me confident that they will ensure each
other's -- and this technology's -- success in commerce.
But, as Andy has been telling his subscribers for the past two years, these
companies are not where the largest gains are to be made from this NFC
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"The winning stock in this space is not likely to be Google. Nor do I think it
will be Sprint, which runs the network, and it's not Citi or MasterCard...
Instead, the likely winner is a company most people have never heard of... It
makes the special chips that go in the phone that "talks" to cash
That was back when shares of this semiconductor manufacturer were trading
around $25 per share.
It turns out Andy was right way before the rest of the crowd caught on. Just
look at how shares have taken off since Andy first recommended the company in
With this NFC chip manufacturer now up 278%
from when Andy recommended it, you might think you've missed the boat.
Not so. In fact, right now there's a potentially huge catalyst for this
stock... namely, from a big purchase from one of the most profitable companies
in the United States.
In September 2014, Apple officially entered the digital payments market
with its "Apple Pay" app, which is compatible with the Apple Watch and the recently-released iPhone 6. As a result, this company's NFC chips will be used in the millions of iPhone 6s and Apple Watches sold in the years ahead.
Even with the 278% gains he's seen over the past two and a half years
from this firm, Andy is still calling the stock
"The #1 Apple Supplier To Buy
Now" for the potentially monumental gains ahead. He's so excited about its growth prospects that he spent the last few months crafting a research report about this supplier and four other key Apple suppliers that he expects to skyrocket in the wake of Apple Pay. To learn more
about his latest research, I invite you to
out his special research alert here.
The bottom line: the outlook of wallets and cash is tenuous, but the growth possibilities of digital payments are endless. Embrace it, and enjoy the ride up.