PayPal PYPL and Block XYZ are well-known providers of digital payments in the rapidly evolving fintech sector. Both offer peer-to-peer payments, Buy Now Pay Later (BNPL) solutions and a cryptocurrency buy-sell platform. An expanding portfolio and rich partner base make both PayPal and Block well-positioned to address the growing needs of the global fintech market. Artificial intelligence and machine learning are bringing rapid changes in the fintech market with growing demand for digital wallets, tokenization and account-to-account transactions. 

So, PYPL or XYZ, which of these Fintech stocks has the greater upside potential? Let’s find out.

The Case for PYPL Stock

Portfolio strength has been helping PayPal maintain deep and trusted relationships with merchants and consumers. Its two-sided platform helps develop direct financial relationships with customers and merchants. PYPL’s investments in improving branded checkout, person-to-person (P2P) and Venmo are helping in driving total active accounts. The company’s gradual evolution from a payments company to a commerce platform bodes well for investors.

In first-quarter 2025, transaction margin dollars grew 7% year over year to $3.72 billion, driven by omnichannel commerce, both online branded checkout and offline branded payment methods, Venmo, and Payment Service Provider (PSP). Venmo revenues grew 20% and accounted for 18% of Total Payment Volume (TPV). PayPal expects transaction margin in dollar terms (ex-interest on customer balances) to grow between 4% and 5% in 2025.

PayPal saw BNPL volume growth of more than 20% in the first quarter, and monthly active accounts grew 18% year-over-year. PYPL stated that BNPL users spend 33% more on average and conduct 17% more transactions. PayPal plans to increase consumer awareness of its BNPL solutions through campaigns in the United Kingdom and Germany, with continuing investments in Australia, France, Italy and Spain. 

The company’s omnichannel strategy has been a success in the United States, and PayPal plans to replicate that internationally. The company remains on track to launch NFC capabilities in Germany later this quarter and bring PayPal everywhere to the United Kingdom in the third quarter of 2025.

PayPal’s expanding partner base, including Fiserv, Adyen, Amazon, Global Payments and Shopify, is also driving prospects.

The Case for XYZ Stock

Block’s comprehensive commerce ecosystem, which enables sellers to combine software, hardware and payment services to accept payments from customers, helps it sustain solid momentum across sellers. The company’s omnichannel offerings, which help sellers create differentiated customer experiences on the back of customer insights by managing orders from POS and eliminating manual aggregation of online and in-person orders, are adding strength to its seller base. 

Block is expanding its portfolio with the new Square POS app that integrates domain-specific commerce and payments functionality into a single, unified app that allows sellers to personalize their offerings. The latest Square Point of Sale app offers seven modes that are purpose-built for different industries.

However, Block has been suffering from a shift in consumer spending. Cash App Card spending in the first quarter of 2025 suffered from lower discretionary spending in areas like travel and media. Challenging macroeconomic conditions don’t bode well for Block’s near-term prospects. Gross profit, which grew 9% year over year in the first quarter of 2025, is now expected to grow 9.5% in the second quarter and accelerate in the second half of 2025, with double-digit growth in third-quarter 2025 and mid-teens in fourth-quarter.