Are these 3 ASX shares Australia’s next fintech stars?

Financial technology, or “fintech”, is one area of the market which I believe has extremely strong growth potential over the next few years.

Whilst fintech companies such as Class Ltd (ASX: CL1) and GBST Holdings Limited (ASX: GBT) have deservedly gained a lot of attention due to their impressive growth, the three fintech shares below may be flying under the radar for some investors.

Could one of these be Australia’s next fintech star?

Afterpay Holdings Ltd (ASX: AFY)

Afterpay provides retailers with the option to allow their customers to buy goods now, but pay for them later without interest or fees. The company takes a small percentage of the sale in exchange for bearing its default risk. With both consumers and retailers embracing the service, I believe Afterpay has a bright future. The service initially started online, but has now expanded into bricks-and-mortar stores in recent months. According to management, the early results have been encouraging. As long as Afterpay is able to keep its net transaction loss rates low, then I expect the company will become profitable as it scales.

ChimpChange Ltd (ASX: CCA)

ChimpChange is a digital banking business which aims to disrupt the US banking industry by providing consumers with an affordable and frictionless user experience. The innovative company hopes to attract the millennial market by providing banking with no monthly account fees. So far things are looking promising, with the total customer accounts on its digital banking platform growing to over 100,000 in July. Disrupting the major US banks will be a hard task. But considering the recent Wells Fargo scandal, I wouldn’t be surprised if some US consumers are becoming distrustful of the big players.

Emerchants Ltd (ASX: EML)

Emerchants provides prepaid debt card programs for consumers and businesses. Amongst its growing number of clients are the likes of Nimble, Ladbrokes, Sportsbet, and Pandora. At present, Emerchants operates in 13 countries and works with VISA, Mastercard, BPAY and Eftpos to deliver over 850 programs. I was very impressed with its recent full year results. The company posted a massive 61% jump in sales to $23 million. I feel confident that Emerchants has positioned itself perfectly to continue this strong growth over the next few years. This could make it a great investment today.

Need to make space in your portfolio for one of these? Removing one of these wealth destroying shares from your portfolio could be a great start.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.