3 fintech shares to watch in 2018

The Afterpay Touch Group Ltd (ASX:APT) share price is one of three which I think could climb higher in 2018…

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Arguably one of the most exciting industries on the share market at the moment is the financial technology or fintech industry.

A number of companies have emerged in the last few years, aiming to disrupt certain areas of the financial industry.

Three fledgling companies which I believe have accomplished this and are well positioned to profit are listed below.

Afterpay Touch Group Ltd (ASX: APT)

This payments company recently revealed that its underlying annualised sales are now tracking in excess of $1.5 billion based on its recent monthly performance. I expect this could accelerate over the Christmas period as more retailers come on board and consumer adoption heightens. Ultimately, I feel confident that Afterpay is here to stay and will only get stronger in the future, though investors ought to keep a close eye on its bad debts in future results.

Class Ltd (ASX: CL1)

In its most recent update this self-managed superannuation fund (SMSF) cloud software provider advised that it has grown its market share to 25% of the estimated 598,000 SMSFs in Australia. As impressive as this and its retention rate of 99.4% is, it evidentially wasn’t enough for the market. Since then its shares have sunk over 34% lower and sit just a few cents above their 52-week low. Class was trading on quite a lofty multiple previously, so this correction was probably justified. But with its shares now trading on a more reasonable valuation, I feel it could soon be worth a look again.

PUSHPAY FPO NZX (ASX: PPH)

I have been very impressed with the progress this payment solutions company has made in the U.S. church donation market. Pushpay recently reported a 145% increase in half-year revenue to US$29.7 million. This was driven largely by the winning combination of a 35% increase in customer numbers and a 46% increase in average revenue per customer. Although it still made a loss, management aims to breakeven on a monthly cash flow basis by the end of 2018. I think it will be one to watch next year.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of PUSHPAY FPO NZX. 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.

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