Fintech stocks have exploded in growth in the last few years. What exactly is fintech though? It is basically a combination of the words finance and technology. It is also a broad category of companies that apply new technology to financial businesses. Some instances include a new digital payment-processing solution, the usage of smartphones for mobile banking, and cryptocurrencies. Fintech companies also consist of both start-ups and established financial institutions that try to replace or enhance the usage of financial services.
Could top fintech stocks be the future? It is possible as more businesses shift their presence online and as we head towards a cashless society. If anything, the coronavirus pandemic has accelerated the world towards cashless payments. Even before the pandemic, cashless payments have already been a growing trend. This pandemic could cause consumers to rely more on online payments and other non-cash payment methods. This spike would then attribute to changes in consumer behavior, which include more online shopping, touch-free payments, and no-contact deliveries.
Fintech companies will then innovate for various ways to carry out financial services in this new era. You only need to look at some of the top fintech stocks to buy like Green Dot (GDOT Stock Report) and Mastercard (MA Stock Report) to see how well they have performed this year. With that in mind, here is a list of top fintech stocks for you to watch before the new year.
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Global fintech giant Paypal (PYPL Stock Report) needs no introduction. The company has over 300 million customers and merchants across 200 markets using its platform worldwide. Notably, the company’s share prices have more than doubled year-to-date. It appears that it is still on investors’ radars this week. This is evident as PYPL stocks hit an all-time high of $244.01 a share on Wednesday’ss opening bell. This is likely due to its huge announcement yesterday.
The company stated that it would be waiving its check-cashing fees for the second round of government-issued stimulus checks. On top of that, customers who received their first stimulus check through PayPal or Venmo will automatically receive their payments through Direct Deposit again. Allowing its massive customer base to cash their checks remotely and quickly is a fantastic play by the company. Investors are clearly aware of the long-term benefits of this move as well. PayPal is cementing its reputation as a reliable platform amidst these troubling times.
Another factor to consider would be its stellar performance shown in its third-quarter fiscal report. In it, the company raked in $5.4 billion in total revenue. It saw an impressive year-over-year gain of 121% in net income and 120% in earnings per share. With solid financials and adaptive strategies, will PYPL stock be a top fintech stock to watch?Top Fintech Stocks To Watch Ahead Of 2021: Fiserv Inc.
Our next entry on this list is Fiserv (FISV Stock Report). The company is a global provider of financial services technology. Its offerings cover a wide range of financial responsibilities ranging from account processing and digital banking solutions to merchant acquiring. On top of that, it also boasts its very own cloud-based point-of-sale solution, Clover. Admittedly, its share prices have gone up by 42% since the March lows.
In the company’s latest quarter posted in October, Fiserv reported total revenue of $3.79 billion for the quarter which marks a 21% year-over-year increase. CEO Frank Bisignano said, “Fiserv again delivered excellent financial results and free cash flow in an environment that continues to be impacted by a global pandemic,” Adding to its current trajectory, the company partnered up with Alliance Data in late October. It is one of the largest card issuers in the U.S. which makes for a promising collaboration. Investors that are watching FISV stock could see this as a means for long-term growth for the company.
Recently, Fiserv acquired Ondot Systems. Ondot is a leading financial digital experience platform. Bisignano had this to say about the acquisition, “By combining Ondot and Fiserv capabilities at scale, we plan to provide our clients with a unified digital experience, spanning card-based payments, digital banking platforms, core banking, and merchant solutions, enabling them to deliver best-in-class solutions that continue to reduce friction for their customers.” With its operations growing at such an explosive pace this year, could FISV stock be a winning fintech stock in 2021?Top Fintech Stocks To Watch Ahead Of 2021: Square Inc.
Square (SQ Stock Report) is a financial services, merchant services aggregator, and mobile payment company that is based in San Francisco. The company markets both hardware and software payment products and has expanded into small business services. Over the years, the company’s product has evolved from helping merchants to accept credit cards via mobile phones into a large-scale business and individual financial ecosystem. Square stock has been up by over 200% year-to-date.
In the company’s third-quarter fiscal posted in November, Square has achieved a gross profit of $794 million, a 59% increase year-over-year. Its Seller ecosystem generated a gross profit of $409 million, up 12% compared to a year earlier. Square’s Cash App also delivered stellar growth, with a 212% increase in gross profit in the same period. Impressively, Seller’s gross payments volume outside the U.S. grew by 46%. This shows how fintech solutions are being widely adopted all over the world.
Recently, the company announced that its Cash App will now allow the user of its Cash Card to earn Bitcoin for the purchases they make. At the end of last month, we saw Square emerge as a huge player in the cryptocurrency market, paving the way for millions to trade bitcoin. With Cash App, the company has generated $1.63 billion in bitcoin in its third-quarter earnings report. This is certainly exciting news for the company and its future. With that said, will you have SQ stock in your portfolio?