With digital technology at its peak, fintech (a.k.a. financial technology) is booming with companies both old and new. Fintech companies all have a common goal: replacing traditional banks and credit card companies.
Investors are watching how the economy and consumer trends are affecting payment processing companies, and here are some that are worth keeping a close eye on.
PagSeguro Digital (PAGS) is a Brazilian-based online and mobile e-commerce service that currently ranks in No. 2 in the IBD 50 roster of growth stocks. PagSeguro is part of Universo Online (UOL) which is Brazil’s most significant internet content producer.
UOL acknowledged that small and medium-sized businesses were the backbone of Brazil’s economy. They made it possible for merchants to receive more payment options at the point of sale.
Mastercard (MA) is expanding its retail payments by moving towards business-to-business (B2B). While Mastercard is on the same footing as Visa (V) at establishing blockchain, Mastercard is growing in cross-border transactions. Earlier this year, they have announced acquiring TransFast, a network that was already performing cross-border payments in over 125 countries.
In September, they announced their partnership with R3, a blockchain software company that uses Corda, a platform designed to make transactions safer. Mastercard is also partnering with Apple (AAPL) on the new Apple Card, which gives added security to users because there will not be any numbers displayed on the card.
Mastercard’s stock is an ideal long term investment due to it climbing up to 40%. With a revenue shy of $15 million in 2018, Mastercard experienced a 20% increase from last year, and 21% more transactions compared to their most recent quarterly results.
Ever since PayPal (PYPL) removed itself from eBay (EBAY), investors have been worried about the company’s future. PayPal shares have been down to 14% compared to 41% previously. Keep in mind that this is the ideal stock for investors that prefer the “buy low, sell high” method. It may appear startling at first, but PayPal is apt to make a comeback.
Paypal is expected to recover and partner with other e-commerce companies. They have also expanded from online checkout to mobile payments and person-to-person transfers with its Venmo service. In this highly competitive market, they have another trick up their sleeve; being the first foreign online payment processing company in China.
Investors who have these stocks are reaping the benefits of the game, and are adding to their current position. While these companies continue to grow, it is not too late to jump and invest in the future of financial technologies.
Sam Gillies is a great example of someone who has led a digital department within financial services and is an excellent person to talk to regarding these stocks.