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We recently compiled a list of the 12 Best Fintech Stocks to Buy in 2025. In this article, we are going to take a look at where PayPal Holdings, Inc. (NASDAQ:PYPL) stands against the other fintech stocks.
The terms finance and technology are combined to form the term fintech. This wide category includes companies that integrate modern technology into financial operations. Fintech companies include, for instance, those that create and run person-to-person payment applications and those that develop innovative digital payment processing solutions.
Many fintech stocks have recovered from the post-COVID-19 down market, but they are still well below their peak as we approach 2025. Nonetheless, the fintech industry has numerous opportunities for long-term potential.
In 2025, fintech is beginning to rebound. Global fintech funding rose to $8.5 billion in Q4 of 2024, a 12% increase from the previous quarter, according to CB Insights. While overall 2024 funding decreased 20% year on year, this is a significant improvement from the 48% and 44% declines in 2023 and 2022, respectively, showing that capital flows to the industry have stabilized.
The regulatory sentiment is also altering. For example, in a statement released on January 21, Travis Hill, acting chairman of the Federal Deposit Insurance Corporation, provided a list of priorities, including plans to
“adopt a more open-minded approach to innovation and technology adoption, which includes a more transparent approach to fintech partnerships and to digital assets and tokenization, and engagement to address growing technology costs for community banks.”
This suggests a more relaxed regulatory framework, which could stimulate a resurgence of fintech activity.
The fact that some of the biggest fintech companies, such as Swedish buy now, pay later unicorn Klarna and neobank Chime, are now indicating plans to go public is another significant clue that the industry is recovering from the blues. Furthermore, since financial monitoring is a crucial component of public markets, this probably signals profitability improvement, which has been a significant difficulty for the fintech industry.
Tyler Griffin, managing partner and cofounder of Restive Partners, stated to American Banker:
"I’d bet that the chief financial officer of every late-stage, privately funded company is at least exploring what an IPO in the near term looks like.”
The financial technology industry has never been static; rather, it thrives on challenging the status quo. Financial services have changed in recent years due to a combination of technological developments, regulatory changes, and economic disruptions. In 2024, fintech saw a massive spike in the usage of AI, mostly for internal use cases like operational efficiency and fraud detection. However, issues with accuracy and privacy continue to restrict consumer-facing applications. According to a Deloitte survey, the biggest obstacle to generative AI adoption in financial services, according to 35% of enterprises, is real-world errors. Financial organizations are hesitant to use AI tools directly with customers because of regulatory sensitivities. Nonetheless, enterprise adoption is speeding up. Within a year, Morgan Stanley introduced its "Debrief" assistant, which OpenAI powers. Meanwhile, BNY Mellon and OpenAI have partnered for several years.