5 Fintech Stocks To Capitalize On A Cashless Society
In the not-too-distant future, cash transactions will become something of a novelty, having been supplanted by various forms of digital payments.
Investors looking to capitalize on this inevitable outcome have a number of options for companies to invest in.
Below are 5 fintech companies that stand out from the crowd and deserve investor attention.
XTM Inc.
The top company on our list, XTM Inc. (CSE: PAID) (OTCQB: XTMIF) (FSE: 7XT), is also the smallest. Their business is similar to that of Payfare Inc. in that both companies are seeking to use digital payments to expand EWA. While PayFare is heavily focused on gig workers and other so-called “1099 employees”, XTM is focusing on the service industry, whose employees are more likely to be paid in cash and expect to take home their wages each day.
Where XTM sets itself apart is the breadth of the company’s platform, Today Pay. In addition to digital payments and online banking, Today Pay hosts a number of other features for employer/employee coordination, including scheduling, callouts and last-minute shift fulfillment.
Also included in Today Pay are a number of functions (collectively called Today Wellness) aimed at boosting employee morale, such as virtual healthcare and financial planning tools. The final vertical of the platform is Today Financial, which is the cloud banking division that allows employees to instantaneously access their funds via a supplied debit card.
The combination of XTM’s small size and ambitious goals mean it has the most upside to any company on this list. Given their focus on the service industry, investors shouldn’t be surprised when their local restaurants begin to use Today Pay to manage their employees.
XTM Inc. last traded at $0.16, up +45.5% YTD.
The company’s maturity and solid business fundamentals are especially attractive to value investors, as is their annual dividend raise that has gone on for over a decade. Faced with uncertain economic times ahead, the least risky stock on the list could weather the storm the best.
Jack Henry & Associates last traded at $152.01, down -13.7% YTD.
Like many tech companies over the last few years, PayPal was overly ambitious in growing its workforce and is now being forced to trim its workforce via layoffs (~7% of the workforce). While unfortunate for the laid-off workers, the cost savings will improve operating margins and, thus, the bottom line. Whether these layoffs lead to a significant impact on revenue growth is still to be determined, but any impact should be minimal relative to the cost savings.
PayPal last traded at $73.68, down -1.21% YTD.
Payfare is bringing EWA to employees and contractors via their digital payment platform. The platform allows employers to pay their employees as soon as the work is completed, giving employees instant access to their funds. The platform also includes a fully built-out online banking division, which includes debit cards and cash-back rewards.
Payfare Inc. last traded at $6.50, up +45.09% YTD.
Since its founding in 2009, the company has acquired a number of other firms and increased its offerings beyond point-of-sale systems. These additions led the executives to rename the evolved company to Block Inc. Today, in addition to its legacy Square division, Block Inc. is also in the business of buy-now-pay-later (Afterpay), web hosting (Weebly) and music streaming (Tidal).
Block Inc. last traded at $74.50, up +15.3% YTD.
