Editor’s Note: This could change how you invest for the rest of your life.

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mobile-banking

A couple of weeks ago I received a compelling promotion from Intuit (Nasdaq: INTU), the maker of Quicken.

Quicken, which I use to manage my family’s finances, is promoting a service called “SparkRent,” which allows you to accept online rental payments for investment properties.

Instead of dealing with checks, delays and so on, the tenants and I do everything electronically. Tenants can pay month-to-month, or just set it to auto-pay, and I do nothing. Well, almost nothing… I pay a buck per payment, which seems reasonable to me.

But Intuit’s email sent my brain into a whirlwind of activity, venturing far past the seemingly obvious answer right in front of me (just do it!).

You see, I’ve just become comfortable with my bank’s mobile banking app. I take pictures of checks to deposit them, pay bills from my phone and get alerts when there is a large payment that’s out of the ordinary. And it’s incredibly convenient.

Intuit’s email promotion for SparkRent showed me that even for my relatively simple life I have multiple options – multiple needs even – for mobile banking and online payment services. There is no functional overlap between my mobile banking app and SparkRent.

And at the moment no single solution fits my needs. Which brings me to my main point.

Mobile banking and online payments is an incredibly fragmented market. And, it’s extremely lucrative. Let that sink in for a moment.

Fragmented… and lucrative. Seems like a good area to invest.

It has been. And I think it will continue to be. The pennies-per-transaction that electronic payment providers charge for their services add up to billions of dollars in profits each year.

Look at Intuit. That stock is up 43% over the past two years and 180% over the past five. Online banking services, like the new offering SparkRent, are a large part of why consumers (and businesses) find Intuit’s products so compelling.

The shift toward electronic payments has made payment providers MasterCard and Visa insanely good investments for investors that bought and held as cash-based transactions evaporated.

And pure electronic payment processors – like PayPal, which is owned by eBay (Nasdaq: EBAY) – have gone mainstream. In 2013, sales of the unit grew by 19% to $6.6 billion. And mobile payments outside of parent company eBay grew by 128%.

That’s why companies with large user bases, like Apple (NYSE: APPL), are thinking about getting into the business.

Apple has access to millions of users through iTunes. And when it looks at privately held companies Square and Stripe, which are seeing their market values surge, the temptation to introduce its own version of PayPal grows harder to ignore.

This is why my brain exploded when Quicken sent me that email promotion. There are a lot of options out there in the realm of mobile banking and online payments. Trying to figure out if there is one solution that fits all your needs is a daunting task.

For now, I don’t think there is a one-size-fits-all solution. Individual needs are too diverse. And frankly, switching costs are very low. So users can just go with what fits at the moment, and change (or add) new services as their needs evolve.

I think the same logic applies to investing in mobile banking and online payments. I already mentioned Visa, Mastercard, eBay and Intuit. Those are the big boys in the space that investors should consider owning. But there are other lesser-known options out there that have a small share of the fragmented market.

I’ll have more to say on the investment implications in the coming weeks. And my boss, Ian Wyatt, will reveal his top pick in the mobile banking area next week. Take a look at his idea. And in the meantime, think about how mobile banking/payments could make your life better.

Published by Wyatt Investment Research at