Fintech is a combination of the words finance and technology. It’s a broad category made up of companies that apply new technology to financial businesses. For example, companies that develop new digital payment-processing solutions are considered fintech, as are companies that build and operate person-to-person payment applications.
The potential of fintech is exciting. You might be surprised at how many cash-based transactions are still happening around the world, and how many people still have their savings at brick-and-mortar banks that barely pay any interest.
In this article, we'll take a look at the different types of fintech stocks, and some specific examples of promising fintech stocks you can buy right now.
Types of fintech stocks
Types of fintech stocks
Fintech is a broad term that refers to any company that applies technology to the world of finance. Many types of companies are under the fintech umbrella. Here are some of the products and services they offer:
- Payment processing.
- Online and mobile banking.
- Online and peer-to-peer (P2P) lending.
- Person-to-person payments.
- Financial software.
- Financial services.
Most fintech companies fall under the umbrella of growth stocks.
Five top fintech stock in 2025
Five top fintech stock investments in 2025
As we head into 2025, many fintech stocks have rebounded from the bear market we saw after the COVID-19 pandemic ended but remain well below all-time highs.
However, there's a ton of long-term potential in the fintech industry. And there are some fintech stocks that look like especially strong opportunities right now. With that in mind, here are five fintech stocks that could make great additions to your portfolio:
1. Block
1. Block
Formerly known as Square, Block's (SQ 0.67%) product suite has evolved from a way for merchants to accept credit cards using their mobile phones into a large-scale financial ecosystem for individuals and small businesses.
Block now processes payments for merchants at an annualized rate of about $240 billion, has its own banking subsidiary (Square Financial Services), and a thriving small business lending platform.
Cash App is especially interesting, with 57 million active monthly users as of late 2024 and virtually unlimited potential to build out its consumer financial service offerings. The platform already offers direct deposits, debit cards, the ability to buy and sell Bitcoin (BTC -0.74%), and a user-friendly stock trading platform. Cash App could still be in the early stages of monetization and could have major upside potential in the future.
2. PayPal
2. PayPal
PayPal Holdings (PYPL 3.25%) is the undisputed leader in online payments -- and so much more. Its Venmo person-to-person payment platform has emerged as an industry leader, and its namesake PayPal brand continues to innovate the ways we pay for things both online and off.
PayPal has a completely new executive leadership team that has been quite active when it comes to looking for ways to reinvigorate the business' growth. So far, the team has successfully boosted efficiency and has rolled out exciting initiatives such as Fastlane checkout and the creation of an advertising platform.
With more than $11 billion in cash and investments on the balance sheet and about $5 billion in annualized free cash flow, PayPal has the financial flexibility to pursue opportunities as they arise.
PayPal has 432 million active accounts in more than 200 countries around the world. In a nutshell, this is a highly profitable industry leader, and there's no reason to believe that will change anytime soon.
3. Bank of America
3. Bank of America
This one might sound odd at first. When many people think of Bank of America (BAC -0.24%), they think of old-school banking -- literally the opposite of fintech innovation.
However, there are some good reasons Bank of America is more of a fintech than it seems. In 15+ years since the 2008-09 financial crisis, CEO Brian Moynihan and his team have done a great job of improving asset quality and focusing on efficiency. Technology has played a big role. Bank of America has been named the No. 1 bank for "Online Banking and Mobile Banking Functionality" by Javelin, as well as the "Best Consumer Digital Bank in the U.S." by Global Finance.
As more customers take advantage of the bank's excellent digital channels, the business will become more efficient. With a valuation that's cheaper than many other large banks and a 2.3% dividend yield, Bank of America is an outside-the-box fintech worth considering.
4. Adyen
4. Adyen
Adyen (ADYE.Y -0.13%) isn't exactly a household name to most U.S. investors, but it certainly belongs in the same conversations as Block and PayPal.
Based in the Netherlands, Adyen provides payment processing solutions to businesses and has operations around the world (including a large U.S. presence). It offers payment solutions for in-person, online, and mobile channels. But, unlike the other major payment processing tech companies, Adyen focuses almost exclusively on large businesses. Microsoft (MSFT 1.05%), Uber (UBER -1.81%), and McDonald's (MCD 0.43%) all rely on Adyen for their payment processing needs. You may recall that eBay dropped PayPal as its preferred payment processor several years ago; that was in favor of Adyen.
Adyen's growth has been impressive, and the business had processed more than $1.4 trillion in annualized payment volume as of mid-2024. Plus, Adyen is highly profitable, with a 46% earnings before interest, taxes, depreciation, and amortization (EBITDA) margin that could get even better as the business scales.
5. MercadoLibre
5. MercadoLibre
MercadoLibre (MELI -0.06%) is often referred to as the Amazon (AMZN 2.39%) of Latin America, and the nickname certainly makes sense. The company has a massive e-commerce business, with well over $50 billion in annualized merchandise sales volume, and it continues to grow at an impressive pace.
The company also has a logistics platform (Mercado Envios) and a lending business (Mercado Credito), both of which have gained serious traction in recent years. Mercado Credito is especially interesting, with 77% year-over-year growth in the credit portfolio in late 2024.
Fiscal Quarter
However, it's the Mercado Pago payments platform that is most exciting, at least from a fintech perspective. The business processes more than $200 billion in annualized payment volume and is growing at a much faster rate than the e-commerce business. Most encouraging is that Mercado Pago is growing fastest when it comes to processing payments outside of MercadoLibre's e-commerce platform. Think of Mercado Pago as an earlier-stage PayPal (remember when it was part of eBay?) that has developed into an impressive business all by itself.
One great fintech ETF to consider
Whenever you have a high-growth and relatively young industry, it can seem intimidating for investors to try choosing one or two stocks. And that's especially true in a volatile and unpredictable market environment like we saw in the bear market a few years ago.
With that in mind, an alternative that lets you profit from the fintech boom without having to pick individual stocks can be an exchange-traded fund (ETF). If this sounds good to you, consider the Global X Fintech ETF (FINX 0.94%).
The fund invests in a portfolio of fintech companies and holds more than 60 stocks as of January 2025. The portfolio includes a few of the names on the list above (PayPal is the largest holding), as well as several others, such as Fiserv (FI 1.12%) and Coinbase (COIN 4.92%), plus many others of all different sizes and business models. The point is that all the companies have excellent growth potential, but your investment won't get crushed if one or two of them don't quite live up to expectations.
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A great arena for long-term growth investors
Investing in fintech stocks isn’t for investors with a low tolerance for volatility and risk. Like any exciting growth industry, fintech is likely to be a bit of a roller-coaster ride as the industry matures.
However, for long-term investors with relatively high risk tolerance, fintech stocks such as those mentioned here can be an excellent means of capitalizing on one of the most exciting growth trends in the business world.
FAQ
Investing in Fintech Stock: FAQ
What is fintech?
Fintech, short for financial technology, describes technologies that are being leveraged to make financial processes easier, more efficient, and more profitable. Fintech companies develop a variety of software platforms, apps, hardware solutions, and more to achieve these goals.
What are the best fintech companies to invest in?
These five fintech stocks could make great additions to your portfolio:
- Block.
- PayPal.
- Bank of America.
- Adyen.
- MercadoLibre.
Are fintech stocks cyclical?
Generally speaking, the answer is yes. Fintech stocks are cyclical businesses for the most part. They largely perform in correlation with consumer spending and business investment. That said, not all fintech stocks are equally cyclical. For example, companies that develop technology for insurance companies aren't inherently cyclical since insurance is a rather recession-resistant business. On the other hand, companies that develop payment technologies, which are more vulnerable to the effects of market forces, are more likely to experience significant slowdowns during recessions.
