Dutch-based digital payments specialist Adyen (ADYE.Y -0.70%) shares have been on a tear recently, as the stock skyrocketed 61% in the last month (as of Dec. 5). But share prices remain an eye-watering 63% below their peak price from August 2021. This might prompt some investors to add Adyen to their watch lists.

If you're looking to buy Adyen today, it's a good idea to take the time to know these four things first about this fintech stock.

1. Adyen's business is serving businesses

Adyen caters to enterprise clients, so it doesn't have a consumer-facing presence. Because of this, it's worth understanding what exactly this business does as many people might not be familiar with the operations.

Adyen prides itself on providing companies with a complete payments infrastructure solution, whether they conduct business in person, on a website, or even on a mobile app. The business also sells point-of-sale devices and provides risk management and data insights.

Adyen serves clients in a wide range of industries, like online marketplaces, retailers, and subscription services. Notable customers include Microsoft, Spotify, McDonald's, Uber Technologies, and Etsy.

You can see how Adyen attracts enterprises that might have complex needs due to their global operations.

2. Adyen is dealing with some headwinds right now

Like many fintech businesses, Adyen's investment thesis centers on its growth trajectory. The pandemic was a boon for revenue and payment volume growth, but things have slowed down more recently.

After sales jumped 46% in 2021, they rose by 33% in 2022. And in the latest quarter (ended Sept. 30), revenue and payment volume were up 22% and 21%, respectively, year over year. These aren't terrible growth rates by any means, but they show you that not even Adyen is immune to macroeconomic headwinds, like inflation and higher interest rates.

Nonetheless, management is still optimistic about the long term. In its latest update, it announced that net revenue is expected to increase by more than 20% annually over the next few years. That's a far cry from just a couple of years ago, but it's still an encouraging outlook.

3. Digital payments offer Adyen a sizeable opportunity

The rise of cashless transactions has been a powerful tailwind that benefited Adyen over the years. And there's no reason to think it won't continue doing so. Even in the U.S., there is still a sizable opportunity for digital payment methods to fully replace physical cash.

According to Grand View Research, the digital payments industry is projected to grow at a compound annual rate of nearly 21% between now and 2030. Without a doubt, this is one of the strongest secular trends happening across the economy.

The leadership team believes that as commerce becomes more global, businesses will turn to Adyen's offerings to be able to effectively compete in their respective industries.

4. Adyen has stiff competition, but switching isn't easy

The payments landscape is massive and complex. However, for businesses that find success, it's a very lucrative place to be. Readers are likely familiar with Visa and Mastercard, two dominant payments companies that possess outstanding financials and that have rewarded shareholders over the years. These card networks don't compete directly with Adyen, though.

Adyen does, however, face stiff competition from major players in the industry. There's Fiserv, Fidelity National Information Services, JPMorgan Chase Payment Services, and Bank of America Merchant services. They all provide services that help merchants accept payments.

Adyen is in a favorable position because it should benefit from switching costs. Once an enterprise client goes through the hassle of integrating a payment provider, they likely aren't going to change to a rival company. These switching costs create a competitive moat for the business.

Indeed, in the first half of 2023, 80% of revenue growth was derived from existing customers. And the volume churn was less than 1%.