This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

How to Invest in the Next Game-Changer in Smartphones

Stock quotes in this article: PAY

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Andy Obermueller

Intelligence always moves to the edge of the network.

That wasn't always true of the communications business. The only thing "smart" at either end of this network might be one of the callers, and that certainly varied. Phones used to be nothing more than a speaker, a microphone and set of buttons that sent audible tones the system could recognize as numbers.

Mobile payment means every merchant's checkout device you see needs to be replaced, and Verifone, as the the leading provider of hardware for electronic payment processing, stands to benefit.

That has changed.

The infrastructure of the nation's communications system is still home to some impressive technology, but the real genius is at the edge of the network -- that is, the tablet devices and computers we use to process information and in the smartphones we use to communicate.

After all, the smartphones we all have in our purses or pockets contain more capability than the computers NASA had at its disposal when Neil Armstrong was walking on the moon.

The single most important change this network will undergo in the coming years is right at the edge: the integration of electronic commerce functionality into our smartphones.

I write extensively about this in my newsletter, Game-Changing Stocks. Simply put, I think it's the Next Big Thing.

So far, I've been telling my readers about the consumer side of the market. But what we really need to look at is the company merchants rely on for the state-of-the-art equipment that will allow for seamless smartphone transactions to take place.

That company is Verifone (PAY).

It's the leading provider of hardware for electronic payment processing. And here's the thing: Nearly every one of the devices that you see on the merchant's counter will need to be replaced.

There are two reasons. The first: Customers will be paying with highly secure near-field communication chips instead of handing over their credit or debit cards. But the other trend that's going on at the same time is the mass unplugging of retail point-of-sale terminals.

Well, "unplugging" might be the wrong word. The enterprise system is still there, but increasingly running in the background. The sales clerk is just as likely to process the transaction with a portable device as to ask the customer to walk back to the cash register.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs