In a move that’s got everyone talking, President Donald Trump recently announced that the Treasury Department will stop making new pennies. The main reason? It’s just too expensive.
The U.S. Mint revealed it lost $85.3 million in 2024 producing nearly 3.2 billion pennies, with each penny costing about 3.7 cents to make — way more than each is worth.
Other countries, like Canada, ditched their pennies years ago and saved millions annually, so this move follows a growing global trend. Plus, with digital payments becoming more popular — 92% of consumers in the U.S. and Europe used some form of digital payment last year — the timing makes sense.
In the U.S., digital wallet use for in-store purchases jumped from 19% in 2019 to 28% in 2024. Big players like Visa (V) and Mastercard (MA) are already seeing the benefits of this shift, reporting strong growth in cross-border transactions and e-commerce last year. Visa’s cross-border volume grew by 16%, while Mastercard saw a 20% increase.
With analysts predicting merchants will lean even more toward digital payments as we move away from small coins like the penny, let’s take a closer look at how Visa and Mastercard could come out on top in this changing environment.
‘Strong Buy’ Stock #1: Visa
Visa (V) is a global leader in digital payments, focused on making electronic money transfers easy and secure for everyone. With Trump’s move to stop penny production and the growing shift to cashless payments, Visa is perfectly positioned to benefit from this change.
Visa’s stock has had an impressive year, bouncing back roughly 40% from its 52-week low of $252.70. So far in 2025, it’s up 11%, showing strong momentum.
With a market value of $662.7 billion and a forward price-earnings (P/E) ratio of 31.60x —much higher than the sector average of 11.63x — investors clearly have a lot of faith in Visa’s future growth. On top of that, its dividend yield of 0.66% and a payout ratio of 18.51% make it a solid pick for long-term investors.
In its latest earnings report for fiscal Q1 2025, Visa reported $5.1 billion in GAAP net income ($2.58 per share) and $5.5 billion in non-GAAP net income ($2.75 per share), reflecting year-over-year growth of 5% and 11%, respectively.
Revenue rose by 10% to $9.5 billion, thanks to an 8% increase in payments volume and a 16% jump in cross-border transactions. The company also processed a staggering 63.8 billion transactions during the quarter — an increase of 11%.
Visa’s recent moves show it’s serious about staying ahead in the digital payments space. It acquired Featurespace, an AI-powered fraud prevention company, to improve its ability to detect and stop fraud without slowing down transactions for users.
Visa is also expanding QR payment partnerships across Asia, making it easier for travelers to use their digital wallets abroad while reducing costs for merchants. This is a win-win that promotes financial inclusion.
Analysts are very optimistic about Visa’s future, 36 analysts giving it a consensus “Strong Buy” rating. The average price target is $376.74, which suggests upside of about 6% from its current price.
TD Cowen analysts also emphasize Visa’s growth potential in areas like business-to-business (B2B) and peer-to-peer (P2P) payments, which could add $200 trillion in payment volume over time. The company’s strategic vision aligns seamlessly with the broader economic shift away from cash, making it one of the “unlikely winners” in this new era of currency reform.
‘Strong Buy’ Stock #2: Mastercard
Mastercard (MA) is a global company that helps process electronic payments through its large financial network.
It makes money by charging fees on transactions and cross-border payments and offering extra services like fraud protection and data insights. Essentially, Mastercard acts as the middleman, making sure payments between buyers and sellers are smooth and secure.
Over the past year, Mastercard’s stock has gone up by 24.6%. So far this year, it’s gained 6.9%.
With a market value of $521.9 billion and a forward price-earnings (P/E) ratio of 35.68x —much higher than the industry average of 11.56x — investors clearly see strong growth potential in Mastercard. The company also offers a small dividend yield of 0.53% with a payout ratio of 16.26%, showing it’s committed to rewarding shareholders while still reinvesting in its business.
In Q4 2024, Mastercard reported $7.5 billion in revenue, up 14% from the previous year, driven by a 12% increase in payment volumes and a 13% rise in purchase volumes. Adjusted earnings per share (EPS) came in at $3.82, beating expectations by $0.11.
Revenue grew by 12% to $28.2 billion for the full year, while net income rose 15% to $12.9 billion. The company also repurchased $11 billion worth of shares in 2024 and paid out $2.4 billion in dividends, showing strong financial health and shareholder returns.
Mastercard’s recent moves further strengthen its position in the digital payments space. Its acquisition of Recorded Future for $2.65 billion boosts its cybersecurity capabilities with AI-driven threat intelligence, a critical addition as cyber risks grow in today’s digital economy.
Analysts are very optimistic about Mastercard’s future, with 37 surveyed giving it a consensus “Strong Buy” rating. The average price target is $625.20, which implies about a 10% upside from its current price.
TD Cowen analysts have consistently backed Mastercard as a "Buy," highlighting its strong market position and ability to adapt to changes in the payments industry. As pennies fade into history and cash use declines further, Mastercard is well-positioned to benefit from more digital transactions and greater reliance on its payment solutions.
Conclusion
Ultimately, Trump’s push to eliminate pennies could be a small but significant catalyst for a broader shift toward digital payments. As merchants round prices and consumers increasingly opt for cashless transactions, companies like Visa and Mastercard are poised to benefit. With their strong track records of innovation and strategic acquisitions, these two payment giants will likely emerge as winners in a future where digital transactions become the norm.
