Fintech and payments as hidden inflation hedges
The bull case presented for beaten-down payment processors is that they act as natural inflation hedges because they take a percentage of nominal transaction values.
The argument
The guest noted that while fintech and payment companies have been severely punished since 2021, their high free cash flow yields make them attractive. He argued that if these companies face market skepticism, their best defense is aggressive share buybacks to take advantage of low valuations.
The thesis, stress-tested
✓ What validates it
- ✓Acceleration of share buyback programs utilizing high free cash flow
- ✓Stabilization of branded payment volumes and margins
▸ Risks discussed
- ▸Severe margin pressure on branded checkout from competitors like Apple Pay
- ▸Low single-digit growth deceleration
Hear it yourself
"And every Fiserv, everything in that payment space that all those fintechs that in 2021 we were all bullish about, they've completely gotten smashed. And so, again, I'm not wild about them, and it it was it was more of an exploratory call we did just because they've gone down so much."
00:00 / 00:20
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE