Alphabet (GOOGL Quick QuoteGOOGL - Free Report) recently introduced an “Everything else” feature in Google Wallet for Android to create digital passes for its users.

This option allows users to scan a photo of any pass to create a digital version in Google Wallet.

It also enables users to edit pass information by taking a picture and changing the pass type to business card, car insurance, driver's license, health insurance, ID, library card, passport, residence permit, tax ID or vehicle registration to name a few.

Alphabet is expected to gain solid traction across Android users on the back of its latest move.

Expanding Google Wallet Features Aid Prospects

The Business Research Company report indicates that the digital wallet market is expected to hit $47.7 billion in 2024 and reach $97.54 billion by 2033, witnessing a CAGR of 19.6% between 2024 and 2033. Alphabet is well-poised to capitalize on this solid growth opportunity on the back of its expanding Google Wallet offerings.

Google added a new “Verification settings” feature in Google Wallet for Android, enabling users to choose whether to verify their identity when using payment methods and passes. The new feature also leads to a "Transit payments" option that enables user identity verification before paying with a credit or debit card.

The company unveiled a new “Automatically add linked passes” feature to Google Wallet. This new feature is an addition to the "Passes" sub-section in Google Wallet settings on Android. It allows providers to automatically add event tickets, promotions and offers to existing passes.

Alphabet also announced Google Wallet updates to support open-loop payment systems, providing a dedicated page for recent activity and ride history, showing saved fare caps, connected payment methods and network-specific offerings.

Strengthening Google Wallet features will add strength to the company’s Android offerings. This, in turn, will boost its Google Services segment, which remains the key growth catalyst for the company. Alphabet shares have gained 16.3% in the year-to-date period compared with the Zacks Computer & Technology sector’s return of 14.3%.

The strengthening Google Services segment is expected to aid its overall financial performance in the near term.

The Zacks Consensus Estimate for 2024 total revenues stands at $296.37 billion, indicating year-over-year growth of 15.5%.

The consensus mark for 2024 earnings is pegged at $7.62 per share, indicating a 31.4% rise from the year-ago figure. The figure has been revised upward by 0.3% in the past 30 days.

Competitive Scenario

Growing Google Wallet efforts will aid Alphabet to compete well with some notable industry players like Microsoft (MSFT Quick QuoteMSFT - Free Report) and Apple (AAPL Quick QuoteAAPL - Free Report) , which are also making strong efforts to boost their presence in the booming digital wallet space.

Microsoft is enjoying the growing momentum of its Edge Wallet with new feature updates.

In this regard, Microsoft’s addition of a cryptocurrency wallet to its Edge Wallet remains noteworthy. This feature provides real-time updates on cryptocurrency value fluctuations and logging transactions for effective monitoring.

Meanwhile, Apple is riding on the success of its Wallet app on iPhone or Apple Watch, which securely stores various cards, IDs and other items, allowing users to carry more while minimizing their device's size.

Zacks Rank & A Stock to Consider

Currently, Alphabet carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is Arista Networks (ANET Quick QuoteANET - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have gained 42.1% in the year-to-date period. The long-term earnings growth rate for ANET is 17.20%.