Fintech, or financial technology, is a fairly broad frontier that covers just about everything from e-wallet systems to payment processors to even credit card companies. In fact, Morgan Stanley executive director James Faucette pointed out Visa and Mastercard as the kind of companies that could absorb virtually any negative development in the economy. Faucette also notes that investors are “…underestimating the secular push from digitization” and the growing improvements in overall consumer spending.
Faucette’s report noted that consumers are increasingly going digital in one way or another—whether it’s straight-up online shopping or using mobile payments mechanisms in brick-and-mortar outlets—and that in turn could mean a lot of new opportunity for the payment companies in general. Throw in the spiking numbers in business-to-business payments technology and use of same and the end result is big opportunity afoot.
Though Morgan Stanley is enthusiastic about fintech, tech in general isn’t so lucky. With a trade war in the making if not outright in progress, tech companies may suffer from this. Yet given the prices of tech stocks in general—which have been on the rise all year—the end result doesn’t look half bad.
The good part about fintech is that it’s extremely versatile. There are so many uses for fintech that one or more will likely prove popular. With consumer spending on the rise, and consumer confidence looking pretty sharp overall, investing in the tools that help people spend money isn’t exactly a bad plan. Plus, many of these tools also support businesses which spend money in the pursuit of making more money. That’s good news for the fintech sector, and that sheer versatility will make it an attractive investment point.
When you can put your money behind something that helps people spend and lets businesses handle business more smoothly, it’s not a bad idea to do so. Morgan Stanley likely has the right of it here, and mobile payments—and fintech in general—should prove a good investment for the near-term future.