Payments fintechs: The costs and benefits of diversifying into lending
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Payments fintechs have been growing rapidly and building large customer bases, but are often barely profitable
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Diversification into lending activities can substantially lift revenue margins but also opens up fintechs to credit risk
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Brazil’s StoneCo provides a salutary lesson; high financing costs and delinquencies overshadowing strong revenue growth
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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").
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