Fintech Can’t Be Stopped — 1 ETF to Buy
Last week, Visa’s share price fell more than 6% in a single day.
It was the stock’s biggest single-day drop in nine months. And it came off the news that the Department of Justice had launched a probe into the company.
Visa may be unfairly dominating the market by limiting merchants from routing transactions through less expensive card networks.
This means Visa gets larger transaction fees … at the expense of merchants. And those merchants will often pass on the higher costs to customers in the form of even higher prices.
Basically, everyone loses except Visa.
While the company maintains that its practices are all legal, this news isn’t surprising. Traditional finance companies have always prioritized raking in fees to make a profit.
What can small and medium-sized businesses — not to mention customers — do?
It turns out that the answer lies in one rising option: “fintech” companies. And they’re handing us the chance to profit…
The Future of Finance
The pandemic is accelerating the movement toward technology in our lives.
Brick-and-mortar stores are closing down as e-commerce giants like Amazon gain favor. Streaming services like Netflix have contributed to the slow death of cable. Telehealth options are becoming essential replacements for in-person doctor visits.
And now, financial technology — known as fintech — is displacing traditional finance.
As Alpha Investor founder Charles Mizrahi has told me, fintech has led to all sorts of solutions… We’re seeing better banking and credit terms for individuals and customizable payment solutions for small businesses.
Many people have likely used PayPal (Nasdaq: PYPL) at some point for online purchases or sending payments to friends and family. Or, they might’ve gone to a coffee shop that uses Square (Nasdaq: SQ) or Stripe readers to process their cards.
And shareholders are profiting. Over the past three years, PYPL is up over 230% and SQ is up nearly 490%. (Stripe isn’t a publicly traded company yet, but we know its valuation grew from around $20 billion in 2018 to about $95 billion today.)
This is why we’ve seen traditional finance giants try to get their own piece of the fintech pie…
Earlier this year, Visa tried to acquire fintech startup Plaid, which provides solutions for apps to securely use financial information.
The deal ultimately fell through because of concerns from antitrust regulators. And Plaid is now raising its own funding that could put its value at nearly $15 billion — triple what Visa was going to pay for the business.
Think about that. Visa is the largest card provider in America. The number of Visa cards in circulation in the U.S. is larger than the U.S. population. And it did over $2.3 trillion in transactions in the last quarter of 2020 alone.
Yet it’s still trying get into the fintech space.
This should tell you how important fintech is for the future of finance. And while it’s not necessarily a new mega trend, there’s no sign of it slowing down.
In fact, opportunities in the space are ramping up — giving you a chance to profit in the years ahead.
The Time to Get in Is Now
Consumers are waking up to this trend. Global consulting firm EY showed that 96% of respondents were at least aware of fintech in 2019. And 75% of them had used a fintech service before.
In the same report, EY found that worldwide adoption of fintech services has jumped from just 16% in 2015 to 64% in 2019.
And this trend is still developing. Research and Markets projects that the global fintech market will grow at a compound annual rate of nearly 24% from 2020 to 2025. It could reach a market value of over $300 billion.
This isn’t something you want to sit out on.
Now, one way you can get exposure to this growing industry is through the Vanguard Information Technology ETF (NYSE: VGT). This exchange-traded fund (ETF) offers broad exposure to a basket of top technology stocks — including fintech like PayPal and Square.
But in order to capture the biggest gains, you have to target leaders in the space.
That’s why Charles has been keeping an eye on several fintech companies that could hand everyday investors triple-digit profits over the next few years.
In fact, he recently showed one to subscribers of his Lifetime Profits service. It’s a rising fintech star that’s serving major global banks.
Its products allow banks to process transactions and offer online services, like smartphone apps. And for the last 15 years, it’s offered the world’s No. 1 banking software.
Today, it’s offering investors a special situation — it’s flying under Wall Street’s radar because it’s virtually unknown among institutional money managers in the U.S.
If you’d like to find out how to access all the details on this fintech leader, you’ll want to click here.
And remember, you always want to buy stocks at attractive prices to maximize your potential profits. This company’s shares are still trading below Charles’ recommended buy-up-to price today. But that might not be the case for long, so be sure to act soon.
Senior Managing Editor, Alpha Investor