The financial industry has been evolving rapidly over the past few years, with the technology we use to send, receive, and spend money continuing to grow at an impressive pace. The conundrum for many investors is that the companies producing the most innovative technologies aren't often known for paying dividends. Even some of the leading fintech companies, such as Square (NYSE:SQ) and PayPal (NASDAQ:PYPL), still don't pay dividends and have no plans to start.

However, some publicly traded companies participating in the rapidly growing fintech industry do pay dividends.

Company

Recent Stock Price

Dividend Yield

Visa (NYSE:V) $209.34 0.6%
Mastercard (NYSE:MA) $343.52 0.5%
Bank of America (NYSE:BAC) $32.58 2.2%
American Express (NYSE:AXP) $126.61

1.4%

Data source: CNBC. Stock prices and dividend yields are current as of Feb. 5, 2021.

Customer making a payment on a tablet at coffee shop.

Image source: Getty Images.

1. Visa

There are more than 3.5 billion Visa-branded credit and debit cards in the world, but with as much as 80% of payment transactions worldwide still being conducted in cash, the company has ample opportunity to grow. While it isn't exactly a high-dividend stock, Visa pays consistent dividend income. Plus, the company has increased its payout steadily over the years and is likely to continue doing so.

Since Visa went public in 2008, its stock has produced an impressive total return of about 1,520% as of February 2021. This performance is due in part to the global trend toward cashless and contactless payments, combined with the gradual but strong rise in e-commerce. And, thanks to payment-focused innovations by companies such as Square, it's easier than ever for merchants of all sizes to accept credit and debit cards.

2. Mastercard

Visa and Mastercard are extremely similar businesses and even pay similar dividends. The pair essentially has a duopoly on the payment card industry in the U.S. and has expanded their presence dramatically in other countries over the past decade or so.

Mastercard is smaller than its rival, with 2.75 billion branded cards in circulation. While Visa has the advantage of being the biggest payment card provider, Mastercard arguably has more room to grow. Even so, all of the leading payment card providers have considerable growth potential. When including service offerings like person-to-person and business-to-business payments, the worldwide payments sector processes an estimated $185 trillion annually, with Mastercard and Visa together responsible for only about $15 trillion of that amount.

3. Bank of America

Although Bank of America probably isn't the first company that comes to mind when you hear the word "fintech," the company deserves a spot on this list.

Of the four biggest U.S. banks, Bank of America could be considered the leader in technological innovation. Scorecard publishers Keynova and Javelin named Bank of America in 2020 as No. 1 in online banking and mobile banking functionality, and Forrester Research (NASDAQ:FORR) has rated the company as No. 1 in digital checking account sales functionality. An impressive 86% of Bank of America's deposits now come from digital sources, as do 45% of the bank's sales. This traction in the digital space should drive major improvements in efficiency in the years ahead, giving Bank of America an edge over its competitors.

4. American Express

Although it doesn't have quite the reach of Visa or Mastercard, American Express has grown impressively in recent years. Its products aren't universally accepted like those of Visa and Mastercard, but the dreaded, "Sorry, we don't take American Express," is being heard less often.

American Express is a closed-loop payment network, meaning that it issues its own credit and processes its own transactions without the involvement or support of any large financial institutions. The company makes money from transaction fees, like Visa and Mastercard, and also from interest income paid on customers' outstanding debts.

Perhaps the best reason to consider American Express is the success it has with the millennial generation. The company offers to holders of high-end cards unique benefits, such as Uber (NYSE:UBER) credits and access to its network of high-end airport lounges. The company has also adeptly added an array of non-travel benefits during the COVID-19 pandemic, which could help it to retain more customers than its peers and perhaps turn millennials into lifelong Amex customers.

Are dividend-paying fintech stocks right for you?

Like most dividend-paying stocks, the companies discussed here are relatively mature businesses. And, while each has considerable growth potential, their stocks are not the fastest- growing in the fintech space by any stretch of the imagination. If the growth potential of your stock holdings is your primary interest, then some of the top non-dividend fintech stocks might fit better in your portfolio.

All of the companies on this list operate well-established businesses, have performed extremely well recently, and have plenty of growth potential. Many of them are also likely to increase their dividends for years to come.