Best Fintech Stocks to Invest In

Fintech is now quite popular, drawing several startup companies. The financial technology industry is anticipated to expand by leaps and bounds in the future, notwithstanding the COVID boost to fintech stocks.

As a result of the expansion of financial technology, the stock market currently offers a diverse array of fintech stocks. Huge opportunities exist within the industry. It currently includes payment services, banking, investing, and insurance, as well as for cryptocurrencies. In spite of this, a number of the industry’s leading brands have had severe adjustments during the last year. Now, some investors may contend that the gloomy feeling is exaggerated. Consequently, it would not be remarkable if fintech stocks finally recovered after the stock market regained stability.

What is fintech?

Fintech, an abbreviation for financial technology, refers to organizations, platforms, and apps that employ technology to provide a financial service. Typically, it is assumed that technology is being utilized to cut costs or enhance service.

Historically, regulatory systems have shielded the biggest corporations in the financial services industry from competition. The establishment of a bank, an insurance business, or a stock brokerage firm requires substantial funds and several permits. This has stopped new businesses from competing in the industry. It also reduced the motivation for institutions to innovate.

Over the last quarter-century, technological advancements and legislative modifications have enabled tech-focused startups to establish a foothold. With the debut of internet trading in the 1990s, the first financial industry to use technology was retail stock brokerage. The investment and payment industries followed, but with sluggish development. The insurance industry has just recently started to see disruption.

Cryptocurrencies play a significant role in the fintech revolution. The majority of bitcoin and blockchain initiatives strive to tackle the same issues as conventional fintech companies. In addition, the tremendous influx of wealth into cryptocurrencies finances fintech innovation.

Additionally, open banking and mobile phones facilitate fintech innovation. Open banking legislation lets users provide third-party service providers access to their bank accounts and investment information. This permits customers to shop around for financial services, as opposed to being compelled to utilize those supplied by institutions. Smartphones, and more specifically fintech applications, have emerged as a significant platform for the delivery of financial services.

Types of fintech companies

Fintech firms may be classified in a variety of ways, and there will always be overlap between the selected categories. However, the majority of fintech stocks fall into one of the following five categories:

Payments and digital wallets – There are now hundreds of online services that provide basic banking services throughout the globe. Few payment platforms have a worldwide reach, although most nations currently have many local platforms. Similar to bank accounts, digital wallets can only be accessed through a website or mobile application. From these wallets, digital payments may be made effortlessly and often circumvent the banking system. In developing market countries, where few individuals have access to conventional bank accounts, mobile payments and banking services have had a big influence.

Cryptocurrencies and blockchain technology – Blockchain technology is used to solve the majority of issues in the financial industry, as well as in other sectors of the economy. Cryptocurrencies, which are effectively “programmable money,” allow the emergence of whole new financial services. Currently, hundreds of decentralized finance (DEFI) apps operating on multiple blockchains are being developed. DEFI apps provide trading, investment, lending, and money market services for cryptocurrencies as well as physical assets. These apps run independently of any central authority. This list’s crypto category overlaps with every other category.

Crowdfunding and lending – Peer-to-peer (P2P) financing platforms promote loans and fundraising for individuals, small enterprises, and organizations. P2P financing is advantageous for both lenders and borrowers since intermediary margins are eliminated. These platforms may also make credit accessible to those who have difficulty borrowing from conventional lenders. Crowdfunding platforms assist individuals and nonprofits in acquiring tiny contributions from a wide audience. Additionally, small enterprises may raise funding using these platforms.

Investing and financial markets – The realm of investing and trading is possibly the most dynamic fintech field. In the 1990s, internet trading platforms were among the world’s first fintech enterprises. Since then, fintech firms have transformed the majority of the investment industry. Some examples of these sorts of businesses include:

Robo-advisors aid people in saving for their financial objectives. These platforms utilize quantitative models to optimize a client’s asset allocation before implementing the approach with passive investment funds.

Alternative financial data sets and algorithmic trading methods’ marketplaces.

Apps for stock trading, such as Robinhood, make investing in stocks very simple for individual investors. These businesses prioritize the simplification of the investing process and the delivery of a smooth customer experience.

Other fintech specializations – Fintech businesses are present in almost every sector of the financial industry. By aggregating information from numerous institutions, many of the first fintech applications and websites helped individuals manage their budgets. Additionally, mortgage origination platforms have existed for some time. These platforms enable customers to get mortgage quotations from various lenders via a single application. 

Insurance is the newest frontier for fintech. It has taken digital businesses a long time to disrupt the insurance industry because a substantial critical mass is necessary. However, as competition in other fintech sectors has intensified, more money may be invested in insurance-focused fintech startups.

Why purchase fintech stocks?

Fintech refers to a wide variety of technologies that combine technology with financial enterprises, making it initially difficult to provide a precise description. In reality, it may be a little disconcerting due to the fact that several firms might flood into the fintech nest, such as organizations that provide payment processing, online and mobile banking, and online and peer-to-peer lending (P2P), person-to-person payments, and financial software and services.

Fintech refers technically to the incorporation of technology into the handling of money, the digitization of money, digital financial services, and the facilitation of credit access. Fintech Magazine predicts that integrated fintech will rule the industry by 2030. This implies that financial services will merge with other items already on the market. As instances of mixed technology, consider Facebook Pay and Apple Card. Additionally, the website describes numerous sectors where fintech will continue to develop:

  • Fintech as a service
  • Hybrid cloud solutions
  • Increased merging of cybersecurity
  • Decentralized finance
  • Artificial intelligence (A.I.) financial assistants
  • Customer experience hyper-performance
  • Invisible ID
  • Exponential computing power
  • Sustainability efforts

Fintech offers a never-ending plethora of opportunities, and it may be worth your while to take a look at various “arms” of fintech investing.

Best fintech stocks to watch


PayPal Holdings (NASDAQ: PYPL) is the uncontested leader in online payment processing, but it is so much more. Its Venmo peer-to-peer payment program has emerged as an industry leader, and its vast user base continues to grow at a dizzying rate. PayPal has also acquired related firms, such as the e-commerce tool Honey, and invested in a variety of other successful companies, including MercadoLibre (NASDAQ: MELI), Uber (NYSE: UBER), and others. PayPal has the financial freedom to embrace opportunities as they occur due to its quarterly free cash flow generation of more than $1 billion.

There are 429 million active PayPal accounts in more than 200 countries. PayPal is doing an excellent job of determining how to improve the monetization of its user base, despite the fact that user growth has halted recently. In a word, this is the industry leader in terms of profitability, and there’s no reason to expect that will change in the near future.


Let’s begin by examining the fintech titan Block. Simply said, the organization develops technologies that allow consumers, enterprises, and sellers to engage in the economy. It does this by assisting sellers in the operation and expansion of their enterprises via its one environment for commerce, business software, and banking services. It is constructing, via its Cash App, an ecosystem of financial goods and services that assist consumers manage their finances by being relevant, immediately accessible, and globally available. Therefore, fintech investors would often monitor S.Q. Stock.

Square released its newest hardware product, Square Register, in Ireland earlier this week. This is a fully integrated countertop point-of-sale (POS) system that would provide Irish companies with complicated requirements with the flexibility required to handle complex operations. In addition, Square Register operates Square for Retail and Square for Restaurants, the company’s vertical POS software. Overall, the organization continues to satisfy the contemporary requirement for multichannel retailing. With a focus on ease for employees and security for consumers, the solution might facilitate the streamlining of corporate processes.

Adyen N.V. (OTC: ADYEY)

Adyen N.V. (OTC: ADYEY) is a Dutch fintech business that offers e-commerce, mobile, and point-of-sale payment technology and services. It enables retailers to transmit and receive online payments, as well as a link to the global payment infrastructure through international credit cards, local cash-based methods, and internet banking methods.

At the end of the first quarter of 2022, ARK Investment Management of Cathie Wood had 1.19 million shares of Adyen N.V. (OTC: ADYEY) worth $23.6 million, or 0.09 percent of its total holdings.

Christopher Donat of Piper Sandler commenced coverage of Adyen N.V. (OTC: ADYEY) on April 14 with an Overweight rating and €1,810 price objective. The analyst believes that the company is “best positioned to take market share from legacy merchant acquirers,” and he believes that the four next-gen payments companies in his coverage have only penetrated a small portion of their addressable markets, thereby presenting substantial revenue-growth opportunities in the coming years.

Adyen N.V. (OTC: ADYY) extended its collaboration with Afterpay, a pioneer in Buy Now Pay Later financial services, in May of 2018. Now, the alliance will handle payments in the markets of the United Kingdom, France, Italy, Spain, New Zealand, and Australia.

American Express

Following that is American Express, an integrated payments corporation. The firm gives its clients access to business-building information, experiences, and products. In addition, American Express offers credit and charge cards to individuals and businesses worldwide. Additionally, investors should be aware that the firm has just announced a regular quarterly dividend of $0.52 per share. Nonetheless, AXP stock has traded sideways since the beginning of the year.

The business and Versapay announced a new arrangement last week to enable American Express virtual card providers with access to Versapay’s world-class collaborative accounts receivable (A.R.) network of buyers and suppliers. This will assist suppliers in increasing efficiency and accelerating cash flow while enhancing the invoice-to-cash customer experience. In the end, the alliance will assist American Express in providing a completely automated acceptance experience, which is crucial as the financial industry continues to grow.


Affirm is a famous provider of “buy now, pay later” (BNPL) services. It lets users pay for a transaction over time using its technology-driven payments network and cooperation with a bank of origin. Financially, Affirm has been operating at full capacity. The firm released its fiscal third-quarter earnings last week. The quarterly sales climbed by 54 percent year-over-year to $354.8 million. In the meanwhile, its Gross Merchandise Volume increased by 73 percent year-over-year, reaching $3.9 billion.

The number of active merchants and active customers on the company’s platform is another crucial measure. In the last year, the number of active merchants increased from 12,000 to 207,000. Its active customer base more than quadrupled to 12.7 million in a similar manner. Affirm also just announced a multi-year renewal of its agreement with Shopify in the United States (NYSE: SHOP). This establishes Affirm as the only supplier of pay-over-time services for Shop Pay Installments in the United States. Currently, Affirm seems to be experiencing a variety of favorable developments.


Fiserv, a payments firm that helps financial institutions shift from physical and manual processes to digital banking solutions, is the next best fintech stock. The firm also assists in fintech startup acceleration. Fiserv’s customers include card issuer processing and network services, payments, e-commerce, and merchant acquisition and processing organizations. Clover’s cloud-based point-of-sale technology is one of its primary offerings.

Fiserv announced a collaboration with “buy now, pay later” startup Affirm Holdings (NASDAQ: AFRM) in May 2022; the agreement would let Fiserv merchant customers access Affirm’s services through its Carat Operating System. Affirm’s chief revenue officer, Geoff Kott, said upon the announcement’s publication, “Our integration with Carat will deliver what we hope will be an even more simple onboarding experience for their wide variety of merchants and, most significantly for us, further extend our omnichannel reach.”

Goldman Sachs

This one may first sound peculiar. Many people associate Goldman Sachs (NYSE: G.S.) with traditional Wall Street business practices — the polar opposite of fintech innovation.

Goldman Sachs has nonetheless made it plain that consumer banking will play a significant role in the company’s future objectives. It has made significant measures to transition from an investment bank and wealth manager for the 1% to a full-service consumer bank. The first component, the Marcus savings and personal loan platform has become very successful in only a few years. The firm entered the credit card sector in 2019 as the exclusive issuer of Apple’s (NASDAQ: AAPL) credit card and has subsequently become a credit card partner for General Motors (NYSE: G.M.). Recently, the Marcus Invest platform with automated investment portfolios was introduced.

Goldman is expanding its consumer business in a very fintech manner, with no expensive branch network to worry about and a tech-centric strategy to optimize efficiency and customer value. And unlike most other fintech, Goldman’s big investment banking division tends to do better in volatile markets, making its stock less cyclical.


JPMorgan, one of the world’s biggest financial holding firms, concludes the list. The business is a frontrunner in the investment banking industry compared to its contemporaries in the banking industry. The company handles billions of dollars in global assets and offers a large variety of financial services. In addition to financial transaction processing and asset management, this includes servicing individuals and companies of varied sizes, commercial banking, and more. The company’s Board of Directors has recently declared a quarterly dividend of $1.00 per share on its common stock.

In addition, JPMorgan announced the debut of “Fusion by JPMorgan” last week. This data platform provides institutional investors with end-to-end data management and reporting options. The platform will enable customers to effortlessly mix and integrate data from numerous sources into a unified data model. Consequently, offering economies of scale and decreased expenses. In addition, the platform would integrate high-quality data with a governance structure that can be used uniformly across the investment lifecycle.

More fintech companies go public.

The IBD Composite Rating is a combination of five IBD stock ratings: the EPS Rating for earnings per share, the Relative Strength Rating, the Accumulation/Distribution Rating, the SMR Rating for sales, profit margins, and return on equity, and the industry group rating. The Composite Rating makes it simple for investors to assess the quality of a stock’s fundamental and technical criteria.

Several fintech stocks went public in 2021, either standard initial public offerings or mergers with special purpose acquisition companies or SPACs. In addition, venture capital financing for payments, e-commerce, online lending, and cloud software businesses has been robust.

Unfortunately, the well-funded fintech company Stripe reiterated that it had no plans to go public soon.

Additionally, several fintech IPOs have been disappointing. On September 20th, Toast (TOST) made its first public offering.

Coinbase Global (COIN) and Marathon Digital (MARA), as well as Sofi Technologies and Marqeta, are examples of stocks that have completed an initial public offering in the past.

Sofi specializes in student and car loans. According to observers, it is becoming a neobank. Recently, federal authorities accepted Sofi’s request for a bank charter. In February, SOFI stock agreed to purchase Technisys, a multi-product core banking platform, in an all-stock deal for $1.1 billion.

In the meanwhile, Marqeta designs debit and prepaid cards for business clients. M.Q. stock’s fourth-quarter financial results exceeded analyst expectations.

Some prominent fintech firms have not yet gone public. The online bank Chime is an example. During a recent investment round, Chime was valued at $25 billion. It provides banking services through mobile devices. It is one of the newest neobanks.

Final thoughts

The financial industry is ripe for upheaval, and there is a strong possibility that some of the best-performing stocks over the next decade will be fintech stocks. This is an industry to keep a careful watch on, but as is typically the case with nascent markets, it is necessary to exercise prudence and maintain limited investments.

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