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1 Big-Cap Fintech Many Investors Haven't Heard of

By Matthew Frankel, CFP® - Apr 13, 2021 at 7:02AM

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This stock isn't a household name for American investors, but it should be.

When it comes to big-cap fintech, stocks like PayPal (PYPL -1.56%) and Square generally come to mind for most investors. But there's another big player called Adyen (ADYE.Y 6.45%) that should be on investors' radar. In this Fool Live video clip, recorded on April 5, Fool.com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss what Adyen is and what it does. 

Jason Moser: Question from Jason Jackson, "What are your thoughts on what Adyen is doing? Do any of you own shares?" I personally do not. Not a business that I have dug a whole heck of a lot into, but I know it's one that is in our Foolish universe. But you got any thoughts on Adyen, Matt?

Matthew Frankel: I know the business really well. You're asking for thoughts on what Adyen is doing. If there is some recent news item, I might not be aware of it yet. They are a payment processing company. They're based in Amsterdam. They're truly global. The biggest visibility that they've gotten in the U.S. I'd say is when they took over as eBay's primary payment processor. Remember, eBay and PayPal have had that relationship forever. Adyen was the one that took that away from PayPal a few years ago. They made a lot of news doing that. I like the business, I like that they target big businesses and are really successful, like Microsoft is a customer, Etsy is an Adyen customer. There's a lot of big companies that are on their customer list. They have not really penetrated anything below the big companies in the market. Midsized businesses only make up about 2% of their payment volume right now. They're actively trying to get into that part of the business. If they are successful, there could be a lot of room to grow. Unlike Square and PayPal, Adyen is really an all-in-one payment processor, meaning that they do in-person payments, they do mobile payments, they do online payments. They provide omni-channel solutions. They provide debit cards. They want to give people no reason to use any other payment processor. For example, a lot of medium businesses in the U.S. are customers of both Square and PayPal. They would use Square for point-of-sale payments and PayPal for online payments. Adyen wants to give people no reason to do that. In terms of size, they're right between Square and PayPal. PayPal had about $1 trillion dollars of annualized payment volume in the last quarter. Square has a little over $100 billion, Adyen is in the $300 billion ballpark rather. They're between Square and PayPal, they're a big company, only about 20% of their revenue is from the U.S. Lot of room to grow. I like the company. I don't know of any recent news but I'm a big fan of theirs.

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Stocks Mentioned

Adyen N.V. Stock Quote
Adyen N.V.
ADYE.Y
$15.01 (6.45%) $0.91
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$266.21 (1.28%) $3.36
eBay Inc. Stock Quote
eBay Inc.
EBAY
$43.72 (-0.48%) $0.21
PayPal Holdings, Inc. Stock Quote
PayPal Holdings, Inc.
PYPL
$73.24 (-1.56%) $-1.16
Etsy, Inc. Stock Quote
Etsy, Inc.
ETSY
$85.94 (-2.61%) $-2.30
Block, Inc. Stock Quote
Block, Inc.
SQ
$64.97 (-2.64%) $-1.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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