Investing in Fintech Stocks

Roberto Rivero

Fintech might not be a word you’re completely familiar with, but the likelihood is that it plays a part in your daily life. So, what are the best fintech companies to invest in in 2024? In this article, we will highlight 2 top fintech stocks and 1 fintech company to potentially watch in the future.

What Are Fintech Companies?

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 many “challenger” banks have emerged, 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.

The Best Fintech Stocks to Watch

The term fintech stock covers a wide variety of companies, ranging from more established names, such as PayPal, to a constant stream of new comers attempting to democratise the financial services industry. In the following sections, we’ll take a look at a couple of the best fintech stocks to watch.

Fintech Stocks
Block
MercadoLibre

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 created two financial ecosystems catering to both businesses and consumers.

MercadoLibre

As well as being a leader in e-commerce 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 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 most remain unbanked and a high proportion of the population work in the informal economy.

One for the Future?

Although it remains a private company, Revolut is currently the most valuable UK fintech. It offers a number of financial products and services, including multi-currency bank accounts, international transfers and investing in the stock market.

After a drawn out process, Revolut recently secured a UK banking licence which will increase the financial services it can offer in the UK and should boost its prospects of securing banking licences in other key markets.

In a recent share sale by employees, Revolut was valued at $45 billion, making it not only the most valuable UK fintech company, but the most valuable in the whole of Europe.

Although there is no prospective date for a Revolut IPO, it is widely anticipated to take place within the next couple of years. Consequently, whilst not currently an option for retail investors, this could be a fintech company to watch in the future.

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 get started, follow these simple steps:

  • Open an Invest.MT5 account and log in to the Dashboard
  • Open the web trading platform
  • 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!
Depicted: Admirals MetaTrader WebTraderBlock Monthly Chart. Date Captured: 28 August 2024. Past performance is not a reliable indicator of future results.

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FAQs on Investing in Fintech

What are examples of fintech companies?

Block, MercadoLibre, PayPal and Wise are all examples of publicly traded fintech companies.

Is fintech a good investment?

Whilst there may be long-term growth opportunities in the world of fintech, due to the relative youth of the industry, investing in fintech stocks is not likely to be suitable for those with a low tolerance for risk. 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.

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  • Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  • With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
  • The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
  • Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
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