Visa (V) and Mastercard (MA) continue to offer investors with a ready path to the broader payments and fintech sector, analysts at UBS said in a new research note on Tuesday.

The credit card issuers provide a balanced exposure to traditional consumer spending as well as new payment methods, showing "persistent" volume growth even during weaker macroeconomic environments and boasting a demonstrated ability to compound revenue in the high single or low double percentage digits each year, the UBS analysts said.

Visa and Mastercard also share other attractive qualities, they said, producing consistent profits and margins along with strong free cash flow conversion and scale compared with their existing potential rivals. Cards issued by either company, for example, are accepted by around 150 million sellers globally, or roughly 60 million more than No. 3 issuer American Express (AXP) and more than double the 70 million merchant acceptance points for Discover Financial Services (DFS) in fourth place.

That "ubiquity" of Visa and Mastercard, the UBS analysts said, "leads to greater consumer confidence when traveling abroad or purchasing items from a foreign merchant."

Longer term, the UBS analysts said the companies face some competitive risks, with selected domestic peer-to-peer platforms such as the United Payment Interface in India or Pix in Brazil allowing for instant cross-border payments to international merchants. Blockchain and stablecoin could be another emerging threat, they said, with Coinbase (COIN) now facilitating "volatility-free" currency and 1% transaction fee on all cryptocurrency payments through its Coinbase Commerce platform.

But both Visa and Mastercard are quickly working to integrate blockchain technologies into their respective payments networks and will also likely play a significant role in rule making, chargebacks and dispute resolutions as those technologies gain more acceptance, the UBS analysts said.

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