Fintech Stocks: 10 Best Fintech Stocks to Buy in 2021

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Don’t miss out on the opportunities that these financial technology companies are creating in this fast-growing industry.  

Despite the rise of technological innovations like the internet and smartphones, many consumers still turn to cold hard cash to make purchases. A recent survey found that physical cash is still used in 19% of payments and that the average American has $74 worth of bills in their wallet at any given time.

But that’s slowly started to change in recent years. The use of cash for payments has declined from one-third of all payments made back in 2017. And it’s very likely that the global pandemic has helped to accelerate consumers’ desire to use digital payment systems. 

Enter the financial technology (fintech) industry. Fintech companies are revolutionizing how consumers pay our favorite coffee shop for a latte, how we split the check after a night out with friends, have allowed us to buy digital cryptocurrencies, and so much more. 

The fintech market is expected to nearly triple in size over the next 10 years and it’s creating a massive opportunity for publicly traded companies and investors alike. That’s why we’re highlighting 10 of the best fintech companies that should be on your investment radar. 

10 Top Fintech Stocks of 2021

  1. Square
  2. PayPal Holdings
  3. Apple (with Goldman Sachs credit card; Apple Pay) 
  4. MercadoLibre (PayPal holds a stake) 
  5. Visa 
  6. Mastercard
  7. Coinbase Global
  8. Green Dot Corporation
  9. Lemonade 
  10.  Upstart Holdings

Square, Inc. (NYSE: SQ)

Square (NYSE:SQ)
Price: $221.95 (as of close Jun 1, 2021)

You’ve probably seen Square’s payment terminals at some of your favorite restaurants, local bookstores, and many small businesses. The company’s payment terminals and its online payment processing system make it easy for companies to collect and manage payments. 

But Square is much more than just a payment terminal company. This fintech leader also has an incredibly popular peer-to-peer (P2P) payment app called the Square Cash App that makes splitting the bill or collecting your roommate’s monthly rent payment as easy as sending a text. 

Square’s Cash App more than doubled its profits in the first quarter of 2021 and it now has an impressive 36 million users.

Now Cash App users can buy and sell bitcoin through the app—a huge move that’s already paying off. Revenue generated through bitcoin sales in the Cash App skyrocketed elevenfold in the first quarter of 2021!

With the company already an established player in the digital payments space—and its Cash App already a leading P2P app and crypto exchange—it’s becoming crystal clear that Square will be a fintech leader for years to come.

Investors are taking notice of the company’s fintech success and have pushed up Square’s share price by an astounding 248% last year.

PayPal Holdings, Inc. (Nasdaq: PYPL) 

PayPal Holdings (NASDAQ:PYPL)
Price: $259.27 (as of close Jun 1, 2021)

One of the most recognizable names in the online financial services industry is none other than PayPal. You might recall that the company got its start back when eBay (Nasdaq: EBAY) launched one of the first e-commerce websites in the United States. Since then it has grown into a fintech juggernaut. 

PayPal has more than 360 million active users, processed $199 billion in total payment volume (TPV) on its platform in 2020, and has successfully tapped into the P2P space with its popular Venmo app.

Like Square’s Cash App, Venmo has become an important tool in PayPal’s fintech services lineup and is helping the company tap into the lucrative cryptocurrency buying and selling market, helping it to compete with Coinbase. 

Through organic growth and several key acquisitions—including Zettle and Honey—PayPal is one of the dominant fintech companies. And there’s no sign that it’s slowing down. PayPal recently said that it’s working on a digital wallet that could help the company expand even further into this market. 

The company’s stock spiked 116% in 2020 and its current expansion into bitcoin buying/selling through its Venmo app should help drive this company forward in the coming years.

Apple (Nasdaq: AAPL)

Price: $124.28 (as of close Jun 1, 2021)

Apple may not come to mind when you think of fintech companies, but this tech leader has made a huge push into the financial services and technology markets that investors would be unwise to ignore. 

First, the company’s Apple Pay app allows users to easily use their iPhone and Apple Watch to sync their credit or debit cards to the app to easily pay merchants electronically and send money to friends. 

Apple has always been very smart about keeping customers tethered to its vast ecosystem and that’s helped the company establish payment data on its 1 billion active iPhone users through their Apple accounts. This makes it nearly seamless for its users to use Apple Pay at payment terminals and websites.

Additionally, Apple took a big step further into finch service when the company launched its own credit card back in 2019, the Apple Card, in partnership with Goldman Sachs (GS). The card links to Apple Pay and Apple calls it “a credit card designed for iPhone.” 

Apple doesn’t earn most of its revenue from fintech, but investors should consider the company a strong fintech play as the tech company continues to expand its influence in the space through Apple Pay and the Apple Credit Card. 

Where to invest $500 right now

Lots of new investors take chances on long shots instead of buying shares of great companies. I prefer businesses like Amazon, Netflix, and Apple — they’re all on my best stocks for beginners list.

There’s a company that “called” these businesses long before they hit it big. They first recommended Netflix in 2004 at $1.85 per share, Amazon in 2002 at $15.31 per share, and Apple back in the iPod Shuffle era at $4.97 per share. Take a look where they are now.

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MercadoLibre, Inc. (Nasdaq: MELI) 

MercadoLibre (NASDAQ:MELI)
Price: $1368.87 (as of close Jun 1, 2021)

MercadoLibre is an Argentina-based e-commerce company that created a payment platform, Mercado Pago, that can be used both on its own e-commerce site and on other platforms. 

Payments made through Mercado Pago have exploded over the past few years. Nearly 2 billion transactions were conducted through the company’s financial services platform, up more than 1000% between 2015 and 2020.

MercadoLibre got a vote of confidence in 2019 when PayPal invested $750 million in the company. With the fintech company’s stock up nearly 200% in 2020, it’s clear that investors view MercadoLibre as a rising star in this industry as well.

Visa (NYSE: V) 

Visa (NYSE:V)
Price: $226.63 (as of close Jun 1, 2021)

No list of fintech stocks would be complete without one of the leading payment processing companies of all time. In 2020 the company processed 140 billion transactions on its platform and the company’s recent moves into blockchain technology mean that Visa is setting itself up for the future of payments.

Blockchain technology, which is a decentralized ledger that allows anyone to view and keep track of transactions, is expanding quickly into fintech as a secure and efficient way to reconcile payments. 

Visa recently began using Ethereum’s blockchain to easily convert digital currency into fiat currency. The company has partnered with Anchorage, a digital asset bank, to make this happen and the result will be faster transactions, more transparency, and even more influence for Visa in the fintech space. 

Blockchain technology will be worth $395 billion by 2028—up 6,700% from 2021!—and Visa’s early moves should help the company benefit from its growth in the coming years. 

Mastercard (NYSE: MA) 

Mastercard (NYSE:MA)
Price: $359.79 (as of close Jun 1, 2021)

Like Visa, Mastercard makes its money from processing the payments on its financial network and charging a transaction fee from those payments. Small fees add up fast, especially when the gross dollar volume processed on Mastercard’s platform totaled $6.3 trillion in 2020.

Mastercard collects fees from fintech services in much the same way it does through traditional payments. But the company has also expanded into blockchain technology as well to offer new types of services to its clients. 

The company is a top 10 holder of blockchain patents—with 89 patents and 285 applications pending—and has already started using the technology to increase the efficiency of international transactions in near real-time.

Reconciling international transactions is typically slow and more costly than domestic ones, so Mastercard’s use of blockchain tech will help save the company money while improving fintech services for its clients at the same time. 

If you’re thinking Mastercard may be too traditional compared to the other fintech stocks available, keep in mind that this payment processor’s share price has spiked 270% over the past five years.

Coinbase (Nasdaq: COIN) 

Coinbase Global, Inc. (NASDAQ:COIN)
Price: $238.93 (as of close Jun 1, 2021)

One of the ultimate plays on the skyrocketing cryptocurrency market right now is Coinbase. The company is a crypto exchange that allows users to buy and sell digital tokens—including bitcoin, Ethereum, and others—and it’s largest of its kind in the United States. 

The company has amassed 56 million users across more than 100 countries and has an astonishing $223 billion worth of digital coins on its platform.

Coinbase just went public in mid-2021, but it’s attracted a lot of attention among investors as the price of bitcoin has shot up 6,700% over the past five years.

Bitcoin and other cryptocurrencies are just starting to gain more mainstream acceptance among financial institutions and merchants. This means that investing in Coinbase now could give investors early exposure to the crypto market, without having to pick a specific digital currency to invest in. 

Green Dot Corporation (NYSE: GDOT)

Green Dot Corporation (NYSE:GDOT)
Price: $40.01 (as of close Jun 1, 2021)

Green Dot may be one of the most established fintech companies you’ve never heard of. The company got its start more than 20 years ago offering prepaid debit card services to consumers and now considers itself a “branchless” bank that provides inexpensive banking services in the United States through its new GO2bank service.

But one of Green Dot’s most significant fintech opportunities is the company’s banking-as-a-service (BaaS) platform. Since most technology companies aren’t banks, they’re limited in what types of financial services they’re allowed to offer their customers. Instead, they pay Green Dot for its BaaS so they can integrate financial offerings into their own platform. 

As a result, Green Dot’s BaaS serves as the backbone of Apple’s, Google’s (GOOG; GOOGL), Amazon’s (AMZN), and Walmart’s (WMT) financial services. 

The company’s stock price has been on a bit of a wild ride over the past three years, but the company’s expanding list of BaaS partnerships, its new GO2bank online service, and a new CEO tapped to turn around the company should help Green Dot reach its full potential. 

Lemonade (NYSE: LMND)

Lemonade, Inc. (NYSE:LMND)
Price: $91.72 (as of close Jun 1, 2021)

Lemonade may be slightly off the beaten fintech path, but the company’s technology is revolutionizing the insurance industry and investors would be wise to take note.

Lemonade uses an artificial intelligence (AI) system to help potential customers find low-cost policies for homeowner’s insurance, renter’s insurance, term life insurance, pet insurance, and (very soon) car insurance. The company also uses AI to quickly assess and process insurance claims, eliminating the need for many customers to interact with a human to get their claim filed and paid.

Its AI-based system helps Lemonade offer lower-priced insurance and the company has been a massive success. In just two years the company has more than tripled its customer count (now at one million) and its upcoming move into car insurance could spur even more growth. 

Lemonade is still unprofitable right now—which isn’t all that unusual for young fintech startups—and its share price has been a little volatile since its IPO in 2020. But this company has wisely created an AI tool to take the pain out of the insurance industry. And its stellar customer growth proves the company is on to something big. 

Upstart Holdings (Nasdaq: UPST)

Upstart Holdings, Inc. (NASDAQ:UPST)
Price: $144.49 (as of close Jun 1, 2021)

Another company using artificial intelligence to bring more value to customers in the fintech market is Upstart. The company offers personal and auto loans to customers, but instead of looking at their credit score, Upstart’s AI looks through other data points to determine loan approvals.

The company says that 71% of its loans are fully automated and the company says that its approval system could help give more customers access to better lending terms by proving to banks that they’re not a risk. 

The result is that there are 75% fewer loan defaults with Upstart when compared to major U.S. banks, when using the same approval rates.

Upstart is a relatively new publicly traded company, with its shares being listed on the stock market at the end of 2020. But since then it’s become one of the best-performing fintech stocks with gains of more than 400%.   

Fintech ETFs: Invest in a Collection of Fintech Companies All at Once

If you don’t feel comfortable picking one tech stock (or a few!) in the fintech space to invest in, there’s another option. Investing in an exchange-traded fund (ETF) can give you exposure to a lot of fintech stocks all at once, without the risk of picking one winner. 

The Global X FinTech ETF (NASDAQ: FINX) is invested in 39 fintech companies comprising insurance, mobile payments, investing, fundraising, and lending. Over the past five years, the ETF has gained more than 200%, compared to about 120% for the S&P 500.

Frequently Asked Questions 

What are fintech companies?

Fintech companies are companies that use technology in the financial services industry. Large payment processing companies including Mastercard are considered fintech companies, and so are cryptocurrency exchanges like Coinbase. Traditional fintech companies, like PayPal Holdings and Square, may offer peer-to-peer (P2P) payment services and payment solutions for merchants. 

What is a fintech stock?

A fintech stock is a company that provides technology service in the financial industry, and that is publicly traded on a stock exchange. Fintech stocks can range from payment processing companies like Visa to banking-as-a-service (BaaS) companies like Green Dot. Many tech stocks, including Apple, can also be fintech stocks if they offer any type of financial service. 

What are the best fintech stocks?

There are many publicly traded companies benefiting from the fast-growing fintech market. Some of the best-performing fintech stocks have been Square, PayPal Holdings, and Upstart.

Where to invest $500 right now

Lots of new investors take chances on long shots instead of buying shares of great companies. I prefer businesses like Amazon, Netflix, and Apple — they’re all on my best stocks for beginners list.

There’s a company that “called” these businesses long before they hit it big. They first recommended Netflix in 2004 at $1.85 per share, Amazon in 2002 at $15.31 per share, and Apple back in the iPod Shuffle era at $4.97 per share. Take a look where they are now.

That company: The Motley Fool.

For people ready to make investing part of their strategy for financial freedom, take a look at The Motley Fool’s flagship investing service, Stock Advisor. They just announced their top 10 “best buys now” across the entire stock market. Whether you’re starting with $100, $500, or more, you should check out the full details.

Click here to learn more

Chris Neiger owns shares of Apple. The Motley Fool owns shares of and recommends Apple, Lemonade, Inc., MercadoLibre, PayPal Holdings, Square, Upstart Holdings, Inc., and Visa. The Motley Fool recommends Green Dot Corporation and recommends the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. Millennial Money is part of The Motley Fool network. Millennial Money has a disclosure policy.