***Please make sure to do your research and consult a professional. I am not a professional and content is intended to be used and must be used for informational purposes only.****
The big financial institutes have dominated for centuries. I think the new technology is testing those institutes and this can be a great thing for consumers. Look around and you can see all the daily tech we are using for our new form of banking. The two companies that have stuck out to me are PayPal (PYPL) and Square (SQ).
Let's take a look at some of the recent trends:
Digital, Peer to peer, Online shopping, Buy now pay later or in instalments, Digital wallets, Mobile pay, Crypto, AI, Automation, Rewards, lower fee structure.
You can look around as she how technology is disrupting the industry. Here are just a few companies doing the disrupting:
PayPal, Square, Robinhood, Apple Pay (Google pay, Samsung pay. Amazon..), Acorns, Chime (?), Varo Money, AfterPAy....
As you can see there are plenty of examples. I have chosen to speak on PayPal but I also like Square. I am just more familiar with PayPal. Over the years, PayPal was primarily known as the eBay payment. That is far from true now. I first noticed a big shift once I saw PayPal as an option at Home Depot. They had been spun off from eBay by that time. Even recently. people made a big fuss when eBay announced that PayPal would not be its primary payment processor. However, it was going to still be an option. I was a little shocked people reacted that way, because by this time PayPal was already making big moves outside that eBay connection. Look at where you have shopped online in recent month and you will see how prevalent it is as a payment option.
The reasons why I like PayPal?
Offers peer to peer in multiple currencies, Consumer to Business payment (where it started), Business POS, PayPal Credit, Venmo (yes venmo!!), and now they are dipping into Crypto.
They hit on most of the big trends. They are looking to continue to innovate and enter new areas. They don't hit all the notes but I like the story and they aren't tied to a bigger company (Apple Pay, Amazon..), are a public company (Robinhood, Acorns), are known (Chimes, afterpay).
I think this is an area with plenty of investment options for the long run. One very large trend is the buy now pay later type formats and for that I would say keep an eye on AfterPay. The trend is the modern online version of layaway. It is less diversified in its business offerings and is a riskier pick. Again, I also like Square (Square card, CashApp, POS, Jack Dorsey).
These would have all been great buys during the March dip. I still think there is value here in many of these Fin Tech companies that will continue to disrupt the industry. Some of these I would keep an eye on for a future IPO or a buying opportunity.
