The old days of using the lame excuse, “I’d love to pay you back but I don’t have my wallet on me” are over. These days, if you’re carrying your smartphone, then you have access to your money.

Leading the charge of online payments for the past 20 years has been PayPal Holdings (NSDQ: PYPL), the “granddaddy” of digital payment processing.

A common misconception is that PayPal was invented by eBay (NSDQ: EBAY) to facilitate purchase payments. In truth, the company was formed in 1998 by two entrepreneurs to facilitate personal digital assistant (PDA) security for storing financial information. Four years later the company was acquired by eBay, changing its focus at that time to enabling online transactions.

The advent of smartphones has expanded the application for online payments to include consumer to consumer (C2C), consumer to business (C2B), and business to business (B2B). Hardly anyone writes a check anymore. Why waste the time and money when you can whip out your phone and pay your bills by pushing a few buttons?

As for that deadbeat friend that never has his wallet on him to pay you back? Through PayPal’s subsidiary Venmo, you can collect money on the spot from anyone that owes you money but seems to have forgotten their wallet as explained in this video:

How Has PayPal Stock Performed?

Since its founding 1998, PayPal has alternated between being a private and public company. PayPal’s initial public offering (IPO) was greeted with great fanfare in February 2002.

Just five months later, eBay acquired PayPal for $1.5 billion. That deal worked out to a 77% premium over PayPal’s IPO price. PayPal remained a division of eBay for the next 13 years.

What is PayPal Stock’s Long Term Stock History?

In July 2015, PayPal once again began trading on the stock exchange after being spun off from eBay. Since then, PayPal stock has more than tripled the return of the overall market, up 159.2% versus 45.1% for the SPDR S&P 500 ETF (SPY).

How Has PayPal Stock Performed Recently?

PayPal stock has also outperformed the market by a wide margin recently. In 2018, PYPL gained 14.2% while SPY was down 4.6%.

Who Are PayPal’s Rivals?

There are dozens of “me too” payment services designed to look a lot like PayPal. However, many of them, such as Stripe, are privately held so there is no stock for you to buy. Others, such as WePay, are subsidiaries of money center banks that tend to trade at a sizable discount to the market.

In addition, the proliferation of cyber currencies such as Bitcoin is starting to put a squeeze on PayPal’s dominance. However, with Bitcoin, there is no company stock to own. Instead, you buy the cyber currency, whose value can fluctuate wildly. For that reason, we believe the biggest threats to PayPal are these three tech giants that facilitate online transactions.

Amazon (NSDQ: AMZN)

Through its Amazon Pay service, Amazon’s 300 million customers can pay for their purchases using information stored in their account profiles.

Read This Story: Our Amazon Stock Prediction In 2019 (Buy or Sell?)

Also, merchants selling goods on Amazon can receive instant payments without going through a third party such as PayPal.

Alphabet (NSDQ: GOOGL)

Google Pay (formerly “Google Wallet”) is a virtual clone of PayPal, enabling users to access all of their bank accounts and credit cards in a single app.

Read This Story: Our Alphabet Stock Prediction In 2019 (Buy or Sell?)

In addition, airline boarding passes and movie tickets that have been purchased with Google Pay can be stored on the same device.

Apple (NSDQ: AAPL)

If you ever stood behind someone at Starbucks and seen them pay for their purchase by waving their phone over a sensor, chances are they were using Apple Pay for that transaction.

Read This Story: Our Apple Stock Prediction In 2019 (Buy or Sell?)

And since Apple’s share of the U.S. smartphone market is 45% compared to 33% for Samsung Electronics (OTC: SSNLF), it stands to reason that Apple Pay will enjoy a similar user advantage over Google Pay.

Will PayPal Stock Go Up in 2019 (Should you Buy?)

Mobile payments are predicted to increase by a compound annual growth rate (CAGR) of 30% over the next four years, from $87 billion in 2019 to $194 billion in 2022. If PayPal can hold on to its current market share, its revenue should increase by a similar amount.

However, PayPal’s guidance for 2019 indicates that the company expects its total sales to grow by 17% this year. In terms of earnings, on a GAAP basis PayPal is expecting earnings per share (EPS) of no more than $1.93 in 2019 compared to $1.71 last year.

Will PayPal Stock Go Down in 2019 (Should you Sell?)

The walls are starting to move in on PayPal. Last year, eBay began transitioning to Adyen as its primary payment processor. By 2021, PayPal will be completely phased out of all eBay transactions. At the same time, Amazon, Google, and Apple are ramping up their proprietary payment options.

At a share price of $95, PayPal stock is valued at 27 times forward earnings. That’s pricey for a company that grew its full-year EPS at a 16% rate in 2018.

During the fourth quarter, eBay revenue was 10% of PayPal’s total processing volume, which will soon dwindle to nothing. If that income can’t be replaced, a solid argument can be made that PayPal stock has peaked and has nowhere to go but down in 2019.

Overall PayPal Stock Forecast and Prediction for 2019

We believe PayPal could merge with a major bank within the next year. Just as JPMorgan Chase (NYSE: JPM) bought WePay, we think PayPal could partner with Citigroup (NYSE: C), Bank of America (NYSE: BAC), or even beleaguered Wells Fargo (NYSE: WFC).

Under that scenario, PayPal would gain access to enough capital to compete with Amazon, Google, and Apple. It would also open up several new payment processing channels to offset the loss of eBay.

If that happens, the impact on PayPal stock will most likely be negative in the short run. Bank stocks trade at much lower multiples than tech stocks. However, in the long run, such a merger could be very positive for owners of PayPal stock.

For that reason, we suggest holding off on buying PayPal stock for now. But if PYPL takes a dive after such a deal is announced, that may be the time to load up on PayPal stock.

I’ve just explained that PayPal could be a growth opportunity in 2019, if circumstances pan out.

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