Even though concerns over rising inflation are causing investors to shy away from fintech stocks—which skyrocketed with the significant increase in remote transactions ushered in by the COVID-19 pandemic—we think the industry has intriguing upside potential given the need for smarter financial transactions in the digital era. So, we think it could be wise to invest now in small cap fintech stocks World Acceptance (NASDAQ:WRLD) and CPI CAR (PMTS (TSX:PMTS)) to capitalize on the industry’s growth. Read on.Fears over rising inflation are motivating investors to rotate away from fintech stocks that gained significantly amid the pandemic with a huge surge in remote financial transactions. This is evidenced by Global X FinTech ETF’s (FINX) 6.1% loss over the past three months compared to the SPDR S&P 500 Trust ETF’s (SPY) 8.3% returns.
However, the industry holds immense growth potential in today’s digital era, which demands financial transactions be smarter and quicker. According to a Research and Markets report, the Global Fintech Market is expected to grow at a 23.6% CAGR between 2020 - 2025.
Given this backdrop, we think it could be wise to bet on small-cap stocks World Acceptance Corporation (WRLD) and CPI Card Group Inc. (OTC:PMTS), which have plenty of upside left.