Fintech companies are completely changing the way we manage our money. New financial technology has made it easier than ever to pay people back, borrow money, and invest money. We’ve rounded up some of the top fintech stocks on the market right now to add to your investment portfolio.
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Best Fintech Stocks To Buy
PayPal (NASDAQ: PYPL)
PayPal is arguably the world’s leading online payment service. By the end of 2020, there were 377 million active PayPal accounts, and that number is only going up.
Many people use PayPal to make personal payments, and it’s also a great way for small businesses to manage their sales. However, it’s also a popular way to pay when shopping on e-commerce websites.
This is because PayPal keeps your banking information safe. Instead of having to provide your credit card information every time you buy something online, you can connect to your PayPal account. PayPal processes these transactions securely.
One of the things that makes PayPal stand out from other fintech companies is their portfolio of acquisitions. Over the years, they have acquired more than 20 relevant companies that offer financial services.
Most notably, PayPal acquired Venmo in 2013. Venmo is a very popular peer-to-peer payment service with a massive user base.
Another one of their notable acquisitions is Honey, an e-commerce plugin for web browsers. Honey helps consumers find discount codes as they shop for products.
PayPal’s growth mindset has been very successful this past year. During the pandemic, many consumers started shopping online more often and using digital payment tools.
The company’s revenue grew consistently over the past several years, and this has been reflected in their stock performance. However, there’s still even more room for PYPL stock to grow as the platform brings in more customers.
Zuora (NYSE: ZUO)
Zuora is a software program that businesses can use to manage subscription services. The software offers billing tools and metrics to help consumers stay on top of payments.
Zuora stock has been growing quietly for the past year. They have managed to beat their earnings and revenue expectations, but have still flown under the radar when compared to other fintech companies.
Some investors think that Zuora could be undervalued, especially considering the stability of their earnings numbers over the past year. However, growth has been relatively slow because of a lack of new enterprise clients. Many companies have hesitated to switch to a subscription model during this difficult economic time.
However, the pandemic will likely come to a close later this year, and the economy is already improving. This means that there could be plenty of room for growth in the future.
Fiserv (NASDAQ: FISV)
Fiserv is an established fintech stock with a full portfolio of products for financial institutions. They work with banks as well as merchants and payment processing companies. Their products include payment processing services, online banking, loyalty programs, fraud risk protection, and more.
The company is based in Brookfield, Wisconsin and has been in business since 1984. Many of Fiserv’s products have become business essentials over the years, especially for both digital and brick-and-mortar retailers.
One of their most popular products is their Clover bundle for small businesses. It is a streamlined POS system that integrates with hundreds of apps. The system can process payments, manage rewards accounts, and much more.
Fiserv has a good track record when it comes to financial growth. While they struggled in 2020 due to lower transaction volume, their earnings will likely pick back up again moving into 2021. Prior to the pandemic, they had several years in a row of strong financial results.
While Fiserv stock has been up and down over the past year, it will likely improve as the economy rebounds.
Top Fintech Stocks
Green Dot (NYSE: GDOT)
Green Dot is another fintech stock with a long history. They are known for launching one of the first pre-paid debit cards back in 1999. The company also offers mobile banking products, including a high yield savings account option.
On the business side, Green Dot offers banking as a service (BaaS), tax services, and payroll services. Integrated bank charter services are becoming an increasingly important part of Green Dot’s income.
Major companies like Apple and Uber use these services. BaaS allows large companies to offer banking products like branded credit cards and peer-to-peer payments without actually operating as a bank.
Green Dot stock has performed very well over the past year. After a slump in 2019 and the first half of 2020, shares rebounded and now trade for over $50 each.
This company is relatively small when compared to some of the other stocks on this list. However, they have huge potential for growth, especially with their BaaS product.
Green Dot’s willingness to innovate has really set them apart. The market for prepaid debit cards is shrinking, but they’ve shifted their focus to other personal finance and business products to grow their client base.
MercadoLibre (NASDAQ: MELI)
MercadoLibre is a Latin American e-commerce platform based in Argentina. Many people compare them to Amazon, but they have a number of unique features that Amazon doesn’t offer.
On the financial side, MercadoLibre runs Mercado Pago, which is an online payment processing platform. Many people in Latin America use this service the same way we use PayPal in the US. The company recently released a Mercado Pago mobile app, which small businesses can use to process payments on the go. They also offer credit lines through Mercado Credito.
On the e-commerce side, their MarketPlace feature matches buyers and sellers and runs online auctions. They also have a tool called MercadoShops, which small businesses can use to make sales directly from their websites.
This year has proved that e-commerce is here to stay, which bodes well for MercadoLibre. They have a massive customer base in Latin America, and have proven themselves to be very adaptable to the needs of their users.
This stock skyrocketed in price in 2020. At the beginning of the year, they were trading for roughly $600 per share. By the end of December, they were trading for over $1900 per share.
This is definitely one of the top fintech stocks to watch in the coming months. While it may not be the cheapest company on the market, there’s still huge potential for long term growth to continue. MercadoLibre could very well be the Amazon of Latin America.
High Growth Fintech Stocks
Square (NYSE: SQ)
Square is one of the buzziest fintech stocks on the stock market right now. The company was founded in 2009 by Jack Dorsey, who is also the CEO of Twitter.
The company began as a way for small businesses to accept credit card payments without having to buy expensive POS systems. However, their portfolio has expanded over the years, and now they offer a wide variety of financial services.
Square’s payment processing system sees billions of dollars in transactions every year. They offer a few different hardware products, including a card reader for smartphones and a POS system that works with the Apple iPad.
Square is also a lender, and provides small business loans through their Square Capital division. They also offer payroll services.
Another one of their most exciting ventures is the Cash App. This is a peer-to-peer payment app that is similar to Venmo. However, the Cash App is slightly different in that it allows users to invest in stocks and cryptocurrency.
Square seems committed to expanding their suite of products and acquiring smaller companies in the fintech space. Their third quarter earnings report was excellent, and their share price has continually gone up as a result.
Stock market experts are anxiously awaiting Square’s fourth quarter earnings report, which will come in late February. If they can continue to perform at this high level, shares could push up even higher.
With an incredible suite of products and strong financial performance, it’s no surprise that investors love Square. This seems to be a fintech stock to hold for long term growth.
Futu Holdings (NASDAQ: FUTU)
Futu Holdings is an online brokerage based in Hong Kong, with operations in both China and the United States. They’ve been tapped as a high growth stock for the next few years. Chinese powerhouse Tencent is one of their biggest investors.
Futu operates two investing apps – Futubull in Asia and Moomoo in the United States. Both apps offer a wide array of market data and wealth management tools, as well as a social media aspect.
Investing apps have become very popular in the United States, so it’s no surprise that Chinese companies want to get in on the action. Futu stock has popped over the last few months, growing over 300 percent since the beginning of 2021.
Since Joe Biden has taken office, many investors have been optimistic about Chinese stocks. While nothing concrete has happened yet, many people believe that President Biden will be open to a more positive relationship with China.
Futu is definitely a stock to keep your eye on right now. Since Futu is relatively expensive right now, you may want to wait for a dip in price before buying.
Fintech Penny Stocks
GreenSky (NASDAQ: GSKY)
GreenSky is a growing fintech company based in Atlanta. They offer online payment and credit solutions for small businesses. Businesses can use GreenSky’s products to offer financing and payment plans on their products.
The ability to offer payment plans is particularly helpful for small businesses that sell relatively expensive products. Payment plans make products more accessible for people with different socioeconomic backgrounds.
Right now, GreenSky stock is trading for roughly $6 per share. Although they struggled during the initial COVID-19 shutdown, their stock price has consistently improved over the last few months.
There are some risks that come with investing in penny stocks. They tend to be more volatile, and investors should be aware of this before adding them to their portfolio.
However, GreenSky is one of many affordable fintech stocks with potential. This stock could be a good way to invest in this industry without spending too much money.
Should You Invest In Fintech Stocks?
Fintech stocks are a great addition to anyone’s investment portfolio. As financial technology improves, consumers are paying in cash far less often. Instead, they’re relying on e-commerce and digital payment solutions to manage their money.
Many small businesses that would have accepted cash in the past are now making the move to go cashless. This means there’s a huge market for both B2B and B2C fintech products.
Additionally, many consumers today prefer to manage their bank accounts online or via a mobile app, instead of going to a bank in person. Many of the top fintech stocks offer mobile-friendly money management solutions.
The fintech industry has done particularly well during the global pandemic over the last year. This is because people are trying to reduce their contact with others to reduce their risk. Digital financial services make it easy to manage your money without having to go to the bank in person.
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Fintech Stocks: Final Thoughts
Fintech companies have been incredibly successful over the past year. As the world moves away from cash and towards digital payments, there’s plenty of opportunity for these stocks to grow even more. Now is a great time to add these fintech stocks to your portfolio, before they get too expensive.