3 Fintech stocks that will make you rich in 10 years

Financial technology (fintech) companies that facilitate online payments and digital banking services had a difficult time in 2022. Dragged down by the broader market downturn and as investor sentiment for technology companies soured, many fintech stocks have seen their share prices halve, or worse, over the past year. But despite the carnage, there’s reason to believe things will turn a corner for fintech stocks.

The fintech market remains robust and continues to grow strongly. According to Allied Market Research global fintech market was worth $110.57 billion in 2020 and is projected to reach $698.48 billion by 2030, growing at a compound annual growth rate (CAGR) of 20.3% through the end of the decade. With this growth in mind, we offer the following three fintech stocks that could make investors rich in 10 years.

PayPal (PYPL)

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A legendary Silicon Valley success story whose founders include Elon Musk, Peter Thiel and Max Levchin, PayPal (NASDAQ:PYPL) is viewed by many investors and analysts as the original financial technology company. It has absolutely dominated online payments since it was founded 25 years ago. Although PYPL stock has had a rough ride over the past year, down 54%, there is every reason to believe that the company and its the stock will recover.

In fact, the PYPL stock has rose 7% to start 2023, showing signs that it may have bottomed out at $67 on December 28 last year. A bullish report from analysts at Truist sparked renewed optimism, which gave the stock a “buy” rating, noting that it remains extremely profitable despite slowing user growth coming out of the pandemic, with a 26% free cash flow margin. Truist also points out that PayPal currently has 432 million active accounts, which means it remains the market leader in the fintech space.

The company also spent nearly $1 billion on repurchase of shares in each quarter of 2022, and it currently trades at about 15 times trailing free cash flow, one of the cheapest valuations in its history. This provides a clear buy-the-dip opportunity.

Block (SQ)

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Investors who believe that cryptocurrencies, in particular Bitcoin (BTC-USD), will survive the current market downturn should consider taking a position in Block (SNEEZE:SQ). The fintech company started by Jack Dorsey (who also co-founded Twitter) has suffered after it began to focus more on cryptocurrencies, just as the market for digital coins and tokens began to collapse. Over the past 12 months, the SQ share has went down 45% until now traded at $71 per share. In August 2021, the shares changed hands at $275 each.

But while Jack Dorsey is a crypto enthusiast, his fintech company doesn’t focus exclusively on digital assets. Block continues to run the popular and profitable Square and Cash app that is widely used by small and medium businesses as well as consumers. The Cash app continues add users and grow at a rapid 36% year-over-year rate. Fans also point out that Block’s crypto exposure is limited to Bitcoin only, and that the company does not allow trading or payments in smaller cryptos that are prone to fraud.

Through its “Afterpay” service, Block is moving into buy now pay later sector which remains popular with consumers, especially those under 30, and is also pushing into traditional banking and money management services through “Round-up”, which rounds up transactions to the nearest dollar and invests the money automatically. Over the long term, SQ stock could prove the naysayers wrong. Thus, it is among the best fintech stocks to buy that will make you rich in 10 years.

Visa (V)

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Credit card giant Visa (SNEEZE:V) is probably not the first company investors think of when they talk about fintech stocks to buy that will make you rich in 10 years. However, the San Francisco-based company, which was founded in 1958, is aggressively expanding into fintech as it recognizes the changes taking place in the world of online payments and transitions to keep pace with the industry. Visa has been gobbling up smaller fintech companies in recent years, taking the technology and intellectual property rights in-house. In addition, the company continues to expand its “Visa Fintech Partner Connect” program, which is designed to help financial institutions connect with approved technology providers that help facilitate online payments.

Visa is clearly trying to use its size and deep pockets to position itself as a leader and enabler in the fintech sector. Beyond fintech, Visa is also a credit giant with 3.9 billion of its cards in circulation, and processes more than 250 billion transactions annually. The company’s net profit margin currently sits at more than 50%, and while down, the stock continues to outperform the broader market. In 2022, the V share fell only around 5% compared to a 19% drop in the benchmark S&P 500 index. Over the past five years, the stock price has risen 82% and is currently trading at $223. Did we mention that it pays quarterly dividends?

At the date of publication, Joel Baglole held a long position in V. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Guidelines for publication.