Best Fintech Stocks

If you're looking to invest in the future of money, start with one of these companies. These four stocks are at the forefront of fintech innovation and are poised to offer investors unreal potential returns as these fintech dynamos continue on their current trajectory. 

You might wonder what's so great about some upstart Bitcoin-Esque company like Coinbase (NASDAQ: COIN) or what Coinbase (NASDAQ: COIN) does that Square doesn't do well enough already. That’s a fair question — PayPal (NASDAQ: PYPL) is a major player in the financial world and it’s been around for years now. Coinbase is a publicly-traded company with an 11% share of the entire cryptocurrency market. But just because a company is well established doesn't mean it can't disrupt its own marketplace with new technology (just ask Facebook). Here are the best four fintech stocks to invest in.

Quick Look at the Best Fintech Stocks:

• Coinbase
• Zuora
• Mogo
• PayPal
• Square

Overview: Fintech Stocks

Fintech is short for financial technology. Companies that use fintech are considered to be a part of the new online banking and payment system that includes players like PayPal, Venmo, and Square. These companies offer faster and more efficient ways to exchange money electronically than going through traditional banks. They operate as intermediaries between individuals and traditional banks, but the user experience is much simpler than dealing with a bank because you don't have to contend with bank rules and its contracts or fees. 

The first fintech company, Dwolla, was founded in 2008 in Des Moines, Iowa, by Ben Milne. Fintech has never looked back.

Best Online Brokers for Fintech Stocks

Take a look at the online stock brokers that Benzinga recommends. Make sure you choose the broker that you feel more comfortable using. When you work with the right broker for your needs, it’s much easier to make wise decisions and manage your portfolio.

Features to Look for in Fintech Stocks

If you're looking to invest in fintech stocks, consider three key characteristics. First, you want to see that the company has been around for a while (at least 3 years).  Established companies can be ripe for the kind of disruption that raises stock prices while inspiring greater confidence that they aren’t as likely to close up shop as a younger business. 

Secondly, look into whether the company offers a product or service that is not already available in its marketplace. For instance, Square (NYSE: SQ) is great if you want to pay for something without using a credit card, but it's not necessarily filling a unique niche by itself — it's just providing an alternative way to make payments. Compare it to the disruptive fintech Betterment, (privately held) who pioneered a new kind of way for regular people to manage and grow their money.  

Finally, if you're considering an investment in an unlisted fintech company, make sure to do your due diligence.  Look first at the business model to make sure that it has a good chance of being profitable, and see how quickly this company can pay its investors back. Then look at the value of the intellectual property (IP), too. Evaluate the company’s IP holdings and determine how they're going to protect their IP  from potential hackers or competitors who want to steal it from them.

Best Bets in FinTech

Fintech is the mover and shaker of the financial world. Find companies with exciting products and excellent financials for the best possible investment choices for your portfolio.