Growth in the financial technology sector has been phenomenal in recent years, thanks to the pioneering work of many organizations in areas including lending, investment, and payment processing. When people started relying more on digital payments and online shopping during the pandemic, PayPal Holdings (NASDAQ: PYPL) saw a spike in sales and became one of the best fintech companies to consider. Concerns regarding the future success of fintech stocks were heightened by their underperformance in 2022 compared to the performance of traditional banking and technology companies. 2023 is a window of opportunity for a stock price rebound.

PayPal still retains 16% of the international payments market. Propel Holdings (TSX: PRL) is another promising fintech company, and it runs online lending platforms known as MoneyKey and CreditFresh. Over the past two years, the company has seen explosive revenue growth and rising profits, with Q3 2022 reporting record quarterly revenue growth of 82% year over year. There is a degree of uncertainty associated with purchasing fintech stocks. Banks and payment processing companies could be badly affected by the prospect of more rate hikes, which could lead to a recession.

Apple’s new BNPL service may threaten PayPal and other digital payment services. While a turnaround in fintech stocks is possible if the economy improves by 2023, shareholders should still proceed with care and anticipate market volatility. Investors should think about the potential of a recession and greater competition from digital giants like Apple when deciding whether or not to take a tiny holding in leading fintech firms like Propel and PayPal as a long-term investment. Investors must do their homework and get expert counsel before making financial commitments.

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