The financial industry is currently undergoing a transformation. Online payments, online banking services, the digitalization of money, easier access to credit, new insurance technologies and other trends are increasingly giving traditional banking business competition. Companies with new and innovative technologies are conquering the market and thus also offer potential for investors. In this article we present a small selection of Fintech stocks. (The word Fintech is a combination of the terms Finance and Technology).
Visa
- Company: Visa Inc
- Symbol (TWS): V
- ISIN: US92826C8394
- Stock Exchange: New York Stock Exchange
- Country: USA
- Currency: US Dollar
- Market capitalization: USD 425.98 billion
- Sales (TTM) in USD: 25.48 billion
Visa is the world's largest digital payments company. According to the company, it expanded its reach to more than 80 million merchants in 2021, an increase of 14 %. The company's strong business and supremacy should make it difficult for competitors to take on Visa, which can be described as a classic "moat". Over the past five years, the company has invested more than 9 billion US dollars in technology to ensure that its users can make secure digital payments. The combination of a rather moderate company valuation (compared to other fintech stocks) and a high return on capital makes Visa shares an interesting candidate for investors looking to invest in the fintech sector.
PayPal
- Company: PayPal Holdings Inc
- Symbol (TWS): PYPL
- ISIN: US70450Y1038
- Stock exchange: Nasdaq
- Country: USA
- Currency: US Dollar
- Market capitalization: USD 112.50 billion
- Sales (TTM) in USD: 25.37 billion
The name PayPal is probably familiar to anyone who has ever made a purchase over the Internet. The company, co-founded by Tesla CEO Elon Musk, was acquired by Ebay in 2002 and has since become one of the biggest players in digital payments. The platform has more than 400 million users and merchants in more than 200 markets worldwide. The continued growth of the e-commerce industry, as well as the expansion of Paypal's services, should ensure that the company continues to grow in the coming years. However, a look at PayPal's stock chart shows that the price has plummeted from over $300 per share to around $100 in recent months, due in no small part to company results that fell short of expectations, as well as increasing competitive pressure.
Block (Square)
- Company: Block, Inc.
- Symbol (TWS): SQ
- ISIN: US8522341036
- Stock Exchange: New York Stock Exchange
- Country: USA
- Currency: US Dollar
- Market capitalization: USD 59.13 billion
- Sales (TTM) in USD: 17.66 billion
Another now major player in the digital payments space is Block. The company, which until recently was known as Square, attracts a wide range of customers, from small businesses to large enterprises with more complex transactions. Block is also focused on global expansion, pushing into new markets such as the United Kingdom, Australia, Canada and France. As contactless payments become more prevalent, Block is well positioned to play a leading role in this growing ecosystem of digital transactions. Block is also heavily involved in the cryptocurrency space. A subsidiary of the company, Spiral, develops and funds bitcoin projects. Block's stock experienced strong hype, particularly in 2020 and 2021, but like PayPal, has fallen sharply in recent months, demonstrating that tremendous volatility is often to be expected when investing in the fintech sector.
Goldman Sachs
- Company: The Goldman Sachs Group Inc
- Symbol (TWS): GS
- ISIN: US38141G1040
- Stock Exchange: New York Stock Exchange
- Country: USA
- Currency: US Dollar
- Market capitalization: USD 110.50 billion
- Sales (TTM) in USD: 58.98 billion
When you first think of Goldman Sachs, you certainly think of the exact opposite of a fintech company. Goldman is one of the best-known banks in the USA and stands for old-school Wall Street business. However, the company is in the midst of transforming its business model, moving from an investment bank and wealth manager for only wealthy clients to a full-fledged retail bank. The savings and personal lending platform called "Marcus" was the first step. In 2019, Goldman Sachs expanded into the credit card business as the exclusive issuer of the Apple credit card. Upcoming products reportedly include an investment platform and checking accounts. The company is building its consumer business without a costly branch network, but with a technology-driven approach to maximize efficiency and consumer value.
MercadoLibre
- Company: MercadoLibre Inc
- Symbol (TWS): MELI
- ISIN: US58733R1023
- Stock Exchange: New York Stock Exchange
- Country: USA
- Currency: US Dollar
- Market capitalization: USD 44.96 billion
- Sales (TTM) in USD: 7.07 billion
MercadoLibre is also known as the Amazon of Latin America. On the one hand, the company has a large and fast-growing e-commerce business; on the other hand, from a fintech perspective, the Mercado Pago payment platform is very interesting. MercadoLibre processes billions of dollars in payment volume each quarter and is growing both in e-commerce and in processing payments outside the e-commerce platform. A partnership with PayPal and a large reach in the Latin American payments space are evidence of further growth potential and make the company an interesting choice for investors looking for an alternative to the mostly US-based well-known fintech companies.