Better FinTech Stocks to Buy in 2025: PayPal or Visa?
There are many global trends that have been shaping our economy lately. One area that deserves more attention is the intersection of finance and technology.
There are many to be said. Fintech stocks to choose. However, investors may have their eyes on it PayPal (NASDAQ: PYPL ) And Visa (NYSE: V )Both have good qualities. Which of these payment enterprises is the best to buy in 2025?
One similarity you will notice with these companies is that their Economic waves Supported by Network effects. PayPal has 432 million active users consisting of merchants and consumers. As the platforms expand, it becomes more valuable to everyone.
Visa, meanwhile, counts 4.5 billion active cards in use worldwide. These are accepted at over 130 million merchant locations worldwide. Again, as the card and merchant base grows, the network becomes more valuable to both parties.
PayPal and Visa will benefit from the expansion of cashless transactions, a global trend that is still far from over. According to the Pew Research Center, 58% of Americans still use cash for some or all of their transactions during the week. This data is from 2022, so that share may have dropped. However, it does show the runway for cashless transactions, and PayPal and Visa in particular, as they have. This is also true in developed economies.
Investors will surely appreciate that these businesses are financially profitable. Over the past five years, PayPal’s operating margin has averaged 16.4 percent. Visa crushes this figure, with a next-five-year average operating margin of a ridiculous 66.1%.
There are some differences that investors should keep in mind. For starters, PayPal’s rates are cheap. It is traded in a Price-to-income (P/E) ratio of 20 now. That’s not only a 55% discount to its historical average estimate, but also below Visa’s 32 P/E multiple. To be fair, though, visa prices are 8% below the trailing 10-year average.
However, Visa’s premium rating on PayPal is fair. This is an excellent business with very stable financial performance and very good profitability.
Additionally, Visa faces little threat of disruption because it is so entrenched in our economy that it handled $16 trillion in annual payment volume last fiscal quarter. Imagine what would happen if the Visa network were to disappear. A significant amount of international trade will come to a halt.
