Square (NYSE:SQ) has become the magic device of farmers’ markets and small businesses across the country — and the world. And that has been a boon to SQ stock.

Historically credit card processors have not been cool, but that was before the age of mobile hit and the technology began to unleash the power of phones, tablets and laptops as cash registers.

While there is certainly significant competition in this space from big players in the credit card space, SQ stock got its start by enabling small businesses to accept forms of payment beyond cash without having to buy a huge amount of equipment.

It’s no surprise Jack Dorsey, the founder of Twitter (NYSE:TWTR), also founded and runs SQ.

And even after getting pelted in a 25% loss in the past three months, SQ stock is still up an impressive 90% year to date.

Headwinds Ahead for SQ Stock?

There’s no doubt that the coming months will be a tougher slog for non-cash payment processors like Square as consumers slow their spending into next year.

But this short-term issue has already been priced into the stock at this point — at least a good amount of it. If the economy slows in 2019 but doesn’t collapse into recession, SQ stock has a very good environment to continue its growth long term.

When markets correct like this, especially specific sectors, it’s a good time to look at specific stocks and see whether the hits they took make them better buys or better sells. At this point, Square falls in the former camp.

The reality is, mobile payments and cashless payments are becoming the norm, not just in the U.S., but around the world. The financial institutions prefer it (it’s cheaper for them not to have to deal with cash), the card companies prefer it (more revenue) and consumers seem to be getting on board.

And even if the consumers are hesitant, when most of the financial world wants something, they’ll find a way to use a carrot or a stick to get their customers in line with their desires.

The real challenge for SQ stock is staying competitive and growing its base. Just as TWTR is just figuring out how to grow its base — and more importantly, monetize it — so Square has to figure out how to grow beyond its core audience.

But here, the good news is its global presence in Asia and Europe can help boost its fortunes. Also, SQ stock continues to expand its systems so it can accept more forms of payment on more platforms. And it’s also offering point-of-sale products as well as financial and marketing services for its clients.

All this opportunity is balanced with the reality that this is a dynamic space and Square has to navigate some real competition. But given its focus on a sector that big players aren’t used to attracting and smaller players don’t have the breadth to lend much value, it has a very good chance of solid growth for years to come for patient investors.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.