The Best Fintech Stocks to Watch
Fintech might not be a word you’re completely familiar with, but the likelihood is that it plays a big part in your daily life. Online banking applications, tapping your phone to pay, jumping in an Uber without your wallet - these are all examples of how fintech companies have revolutionised our world.
So, for those who want to invest in fintech companies, what are some of the top fintech stocks to watch in 2024?
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What Is Fintech?
Fintech, short for financial technology, is a term that refers to technology which is exploited to make various financial processes more efficient, disrupting traditional financial services in the process.
Probably the most prevalent example of fintech in our daily lives is the evolution of online and app-based banking and payments. Not only have high street banks embraced this technology, but it has led to the appearance of numerous “challenger” banks, which have revolutionised the industry, capitalising on a historical lack of innovation from traditional banking services.
Indeed, this is a familiar story across the world of financial services. For years, significant barriers to entry, including strict regulation and high startup costs, meant that the sector was somewhat of a closed shop. Inevitably, a lack of competition across the industry led to a lack of innovation.
Consequently, major advances in technology and a shifting regulatory landscape made the sector ripe to be shaken up by new, exciting fintech companies. We’ve already mentioned banking and payments, but similar things have happened in lending, insurance and brokerage services.
Top Fintech Stocks to Watch
The term fintech stock covers a wide variety of companies, ranging from more established players, such as PayPal, to a constant stream of new comers attempting to democratise the financial services industry.
With so many companies, investing in fintech may be a daunting prospect, that’s why we have highlighted 2 top fintech stocks for investors to watch in 2024:
Block
Fintech company Block Inc., formerly Square, began life as a payment solution for smaller merchants, allowing them to accept credit and debit cards using a smart phone or tablet.
This legacy business, still known as Square, has evolved into a wider ecosystem for merchants, enabling them to accept online payments, providing payroll services, offering financing and a variety of other services.
Besides Square, Block is also well-known for its personal finance application, Cash App. Cash App provides customers with banking and payment transfer services as well as the ability to buy, sell and transfer stocks and bitcoin.
In this way, Block has successfully created a vast financial ecosystem for both businesses and consumers. It has also expanded into web hosting - through its acquisition of Weebly, buy-now-pay-later - through its acquisition of Afterpay, and digital music streaming – through its majority acquisition of Tidal.
MercadoLibre
As well as being the e-commerce market leader in Latin America, MercadoLibre has a lending operation – Mercado Credito – and a payment processing segment – Mercado Pago.
With these two operations, the fintech stock has sought to capitalise on the limited access consumers have to financial services in the region. In 2022, it was estimated that as much as 70% of Latin America’s population remained unbanked or underbanked, with 58% of point of sale purchases still made in cash.
These figures represent enormous opportunity for fintech stocks to thrive, particularly when one considers that smart phone penetration in the region is around 70%.
In particular, the rapid growth of Mercado Pago has been a key revenue driver for the fintech company. This payment processing arm was initially created as a way to allow unbanked customers to purchase products through the company’s e-commerce platform.
However, it has since evolved far beyond that, becoming widely adopted outside MercadoLibre’s marketplace. Its low-cost QR code transactions facilitate digital payments without needing a bank account, and also allows merchants without card infrastructure to accept non-cash payments. This is a particularly important and practical service in a region where a high proportion of the population work in the informal economy.
How to Invest in Fintech Stocks
With an Invest.MT5 account from Admirals, you can invest in both fintech stocks examined in this article. In order to open an account and start buying fintech shares, follow these steps:
- Open an Invest.MT5 account and log in to the Dashboard
- Find your account details and click ‘Invest’ to open the MetaTrader web terminal
- Search for the fintech stock of your choice and click on the symbol to a price chart
- Enter the number of fintech shares you wish to purchase and click ‘Buy’ to send your order to the market!
Investing with Admirals
Investors who choose Admirals have the ability to invest in over 4,500 stocks and more than 200 Exchange-Traded Funds(ETFs). Click the banner below to register for an account today:
Investing in Fintech Companies – FAQ
What Is Fintech in the Stock Market?
The term fintech, financial technology, refers to technology which has been used to make financial processes more efficient for the modern world. Fintech stocks, therefore, are shares of companies which operate in this industry.
Is Fintech Good to Invest in?
Whilst fintech has revolutionised a lot of our everyday tasks, not every fintech stock is necessarily a good investment. Before investing in fintech, it is important to analyse the fintech company in question and decide whether it aligns with your individual profile and investment goals.
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