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 who rely on their portfolio for income, or plan to do so in the future, 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 Block (NYSE:SQ) (formerly Square) and PayPal (PYPL -1.6%), still don't pay dividends and have no plans to start.

Customer making a payment on a tablet at coffee shop.
Image source: Getty Images.

List of stocks

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

Data source: CNBC. Stock prices and dividend yields are current as of Sept. 5, 2024.
Company Recent Stock Price Dividend Yield
Visa (NYSE:V) $277.83 0.75%
Mastercard (NYSE:MA) $474.71 0.56%
Bank of America (NYSE:BAC) $40.27 2.58%
American Express (NYSE:AXP) $249.49 1.12%
Ally Financial (NYSE:ALLY) $41.01 2.93%

1. Visa

1. Visa

There were more than 4.5 billion Visa-branded credit and debit cards in the world as of mid-2024, but with as much as 80% of payment transactions worldwide still being conducted in cash, the company has ample opportunity to grow. Although it isn't exactly a high-dividend stock, Visa pays consistent dividend income. The company has steadily increased its payout 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 2,110% as of September 2024. 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 Block, it's easier than ever for merchants of all sizes to accept credit and debit cards, which should continue to serve as a tailwind for Visa and other payment processors.

2. Mastercard

2. Mastercard

Visa and Mastercard are extremely similar businesses and even pay similar dividends. They essentially have a duopoly on the payment card industry in the U.S. and have dramatically expanded their presence in other countries over the past decade or so. They offer an excellent combination of safety, income, and growth potential, which is rare in the fintech industry.

Mastercard is smaller than its rival, with more than 3.4 billion branded cards in circulation as of mid-2024. Although 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 such as person-to-person and business-to-business payments, the worldwide payments sector processes an estimated $185 trillion annually. Mastercard and Visa together are responsible for about $25 trillion of the total.

3. Bank of America

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. In 2023, Global Finance named Bank of America the "Best Consumer Digital Bank in the U.S."

An impressive 53% of Bank of America's sales now come from digital sources, and 77% of its banking households have adopted the bank's digital platforms. 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

4. American Express

Although it doesn't have quite the reach of Visa or Mastercard, American Express has impressively grown 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 holders of high-end credit cards unique benefits such as Uber (UBER 6.59%) credits and access to its network of high-end airport lounges. The company has also added an array of non-travel benefits, which could help it retain more customers than its peers and perhaps turn millennials into lifelong Amex customers.

5. Ally Financial

5. Ally Financial

Ally Financial (ALLY 0.13%) was spun off from General Motors (GM -1.13%) in the wake of the 2008-09 financial crisis but has since evolved into a full-featured online bank. On the lending side, Ally still focuses on auto loans but also offers mortgages and credit cards.

The company has an excellent online app, and its deposit products are used by more than 3 million customers. It has more than $142 billion in retail deposits, as well as an investment platform and several other banking products and services. Ally was recently named the "Best Online Bank" by Money magazine.

Ally is a highly profitable bank that earns impressive net interest margins due to the relatively high-interest nature of the auto loan business. It pays a dividend yield of almost 3%, and the payout is likely to increase significantly over time.

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Are dividend-paying fintech stocks right for you?

Like most dividend-paying stocks, the companies discussed here are relatively mature businesses. And, although 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-paying 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 and can be relatively recession-resistant, especially Visa and Mastercard.

Ally is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Matt Frankel has positions in Ally Financial, American Express, Bank of America, Block, General Motors, and PayPal. The Motley Fool has positions in and recommends Bank of America, Block, Mastercard, PayPal, Uber Technologies, and Visa. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors, long January 2025 $370 calls on Mastercard, short January 2025 $380 calls on Mastercard, and short September 2024 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.