What is FinTech? A Beginner’s Guide

FinTech is a buzz word we hear all of the time but what is it really? FinTech stands for “Financial Technologies”. You can think of Financial Technologies as all of the software, mobile apps, and other technologies created to streamline and improve everyday transactions for businesses and consumers. For example, Cash App or Zelle allow consumers to send money at any time of day from one bank account to another. Both methods help to make life easier for people, especially in comparison to giving a person cash and them having to deposit the cash received into a bank account.

In this beginners guide we’ll discuss various types of FinTech products, a brief history, and some fintech investments for 2022.

Different Types of FinTech Products

Some examples of FinTech products include:

  • Chase mobile app (mobile banking)

A Brief History of FinTech

You may think FinTech is a new concept but it isn’t. Fintech technology started in the 1950s with the introduction of the first universal credit card. It was introduced by Diner’s club and could be utilized at a bunch of different establishments. How the Diner’s club credit card started is actually a funny story. Co-founder Frank McNamara took clients out to dinner and realized he’d left his wallet in another suit. His wife paid the bill and Frank thought up a charge card that would help him avoid embarrassment next time. He pitched the idea to the restaurant owner and he loved it, the first universal credit card was born. Last fun fact, it was actually made of cardboard (take that new aged stainless steel Amex platinum).

That’s a good segway to our next point in history since American Express introduced their first credit card called the travel and entertainment card in 1958. Credit cards helped to eliminate the need for consumers to carry physical cash in their day to day life.

When it comes to FinTech products operating on the internet, PayPal was founded in 1998. Before the company was known as PayPal, it was Confinity and was co-founded by Peter Thiel, Max Levchin, and Luke Nosek. Confinty merged in 2000 with online banking company X.com founded by Elon Musk (yup the Tesla & SpaceX co-founder) , Harris Fricker, Christopher Payne and Ed Ho. The company was rebranded to PayPal in June 2001 and launched its first IPO (Initial Public Offering) in February 2002.

Fintech Investments for 2022

The potential of fintech is so damn exciting. Even after the global pandemic and growth of transacting without cash (I know y’all remember your germaphobe period), the majority of payment transactions around the world are still done in cash. There are currently 1.7 billion people on earth without bank accounts. Debit cards only accounted for 28% of all payments in 2020. This only means the FinTech industry still has a lot more room to grow. Here are some FinTech investments to look out for in 2022.

Block (NYSE:SQ)

We used to know the company as Square until it rebranded to Block in December of 2021. Square was first introduced to us as the piece of hardware you can insert into your phone to accept debit and credit card payments while on the go. Since the company was founded in 2009, it has grown into a juggernaut in the FinTech space. Block currently processes $100 Billion in card transactions annually. The company also launched its own banking subsidiary called (Square Financial Services) and got into the buy now pay later space with the $29 billion acquisition of afterpay. Block also has a growing lending platform for small businesses.

Now let’s talk about one other interesting part of Block’s business. The infamous Cash App has 44 Million monthly active users and provides additional potential for Block to build out its Financial Services offering for consumers. Cash App already offers a debit card, direct deposit, the ability to buy and sell cryptocurrency, as well as an easy to use stock trading platform.


PayPal Holdings is the undisputed leader in online payments, but it is now so much more than that. Its Venmo person-to-person payment platform has emerged as an industry leader and continues to increase its massive user base (83 million) at a breathtaking pace. PayPal has also been acquiring businesses, such as e-commerce tool Honey, and has invested in several other successful businesses, such as MercadoLibre (NASDAQ:MELI), Uber (NYSE:UBER), and more. With more than $1 billion in free cash flow generated every quarter, PayPal has the financial flexibility to pursue opportunities as they arise.

PayPal has 429 million active accounts in more than 200 countries around the world. Although user growth has slowed down a bit lately, PayPal is doing a great job of figuring out how to increase monetization of its user base. In a nutshell, this is a highly profitable industry leader, and there’s no reason to believe that will change anytime soon.

Visa (NYSE: V)

Visa: Amongst the most valuable companies in the world, Visa is a card network that facilitates electronic funds transfers. I know you’ve seen the Visa branding on credit cards, debit cards and prepaid cards. Visa created technology that enables electronic funds to move from your bank account to a merchant’s bank account when you purchase an item online or in person (all in seconds). Visa processes 235.5 billion transactions annually for a total transaction volume of 13 trillion. Visa’s annual revenue in 2021 was 24.1 billion (an increase by 10% from 2020) with margins of 51%.

Visa also recently began using Ethereum’s blockchain to easily convert digital currency into fiat currency. The company partnered with Anchorage, a digital asset bank, to achieve faster transactions, more transparency, and even more influence for Visa in the fintech space.

Hope this beginner’s guide was helpful! Oh yeah, I have to throw in the disclaimer :). The information contained in this article is for general information purposes only. In no event will I be liable for any loss or damage derived from the information provided. Peace y’all.

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