In the rapidly evolving world of digital payments, two companies continue to lead the charge: Visa Inc. V and PayPal Holdings, Inc. PYPL. Both have played pivotal roles in transforming the global payments landscape, each carving out a dominant position in its niche. Visa is the backbone of card-based transactions worldwide, while PayPal has redefined peer-to-peer payments and remains a key innovator in e-commerce and mobile payment solutions.
As digital payment adoption accelerates across both developed and emerging markets, Visa and PayPal are capitalizing on the trend with ambitious international growth strategies. Yet their approaches, financial stability, and long-term prospects diverge in meaningful ways, making a head-to-head comparison especially timely. For investors seeking strong, long-term exposure to the digital payments space, the choice between these two fintech leaders is not always clear. Let’s dive in and closely examine their fundamentals to see which stock offers greater upside right now.
The Case for Visa
Visa (market cap of $572.7 billion) remains the undisputed leader in global payments, processing over $13 trillion in payment volume in fiscal 2024. Its success stems from a powerful international network, exceptional brand equity, and deep ties with financial institutions worldwide. Unlike PayPal — which functions both as a digital wallet and a payments processor — Visa operates behind the scenes as the backbone of digital transactions, enabling secure, instant payments across borders.
A key strength of Visa lies in its broad and diversified international footprint. Operating in over 200 countries, Visa reported in its first quarter of fiscal 2025 that more than 65% of its total transactions originated outside the United States. This geographic diversity not only spreads risk but also fuels growth, especially as the shift from cash to digital payments accelerates in emerging markets. Visa continues to deepen its presence in regions like Africa, Latin America, and Southeast Asia through strategic partnerships with local banks and fintech firms, embedding itself into the financial infrastructure of high-growth economies.
From a financial standpoint, Visa delivers remarkable consistency and efficiency. It beat earnings estimates in each of the past four quarters with an average surprise of 3%.
Visa Inc. Price and EPS Surprise
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
It posted an impressive adjusted operating margin of 69.3% and generated $5.1 billion in free cash flow in the first quarter of fiscal 2025 alone. The company maintains a strong balance sheet, with a long-term debt-to-capital ratio of 30.3%, lower than PayPal’s 32.6%. Visa returned $16.7 billion to shareholders through share repurchases in fiscal 2024, followed by an additional $3.9 billion in buybacks and $1.2 billion in dividends in the first quarter of fiscal 2025.
Even amid global macroeconomic uncertainty, Visa continues to deliver steady revenue and earnings growth, highlighting its resilience and scalability. Beyond maintaining its core business, the company is actively investing in innovation to stay ahead. Its moves into real-time payments, B2B services, crypto and blockchain-based solutions reflect a forward-looking strategy. Acquisitions such as Featurespace (AI payments protection) and Pismo (cloud native APIs) further strengthen Visa’s ability to lead in every facet of global payment infrastructure. In short, Visa combines scale, stability and growth — particularly in international markets — making it a formidable long-term investment.
The Case for PayPal
PayPal (market cap of $63.3 billion) has long been a digital payment trailblazer, particularly among consumers and small businesses. With over 434 million active accounts, it remains a central player in e-commerce and peer-to-peer payments through Venmo. However, its total payment transactions fell 3% year over year in the December quarter of 2024 to 6.6 billion, while Visa saw 11% growth to 63.8 billion transactions over the same period.
Despite its solid U.S. presence, PayPal’s global reach lags behind Visa. Although it has made progress in Europe and parts of Asia, international growth has been constrained by regulatory challenges, local competition and relatively weaker brand recognition. Visa’s deep-rooted partnerships and widespread acceptance, both online and in-store, give it a clear edge globally.
Financially, PayPal’s metrics are solid but under pressure. Adjusted operating margin in the fourth quarter of 2024 has contracted 34 basis points to 18%, and its revenue growth has decelerated post-pandemic. Still, it beat earnings estimates in all the past four quarters with an average surprise of 14.3% and its free cash flow surged 58.7% in 2024, recovering from prior declines.
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote
While PayPal continues to innovate in areas like BNPL and digital wallets, its heavy dependence on the U.S. market (57% of fourth quarter 2024 net revenues) and lower international scale make it more vulnerable to domestic economic frictions. Its global potential is real but not yet fully realized.
How Do Zacks Estimates Compare for V & PYPL?
The Zacks Consensus Estimate for Visa’s fiscal 2025 sales and EPS implies a year-over-year increase of 10.2% and 12.5%, respectively. The EPS estimates have been trending northward over the past month.
Zacks Investment Research
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for PayPal’s 2025 sales and EPS implies a year-over-year rise of only 3.7% and 7.5%, respectively. The EPS estimates have been trending southward over the past week.
Zacks Investment Research
Image Source: Zacks Investment Research
Valuation: V vs. PYPL
From a valuation standpoint, Visa may appear more expensive, but its premium is well-earned given its size, operational consistency and international growth opportunity. Visa is currently priced at 27.57X forward 12-month earnings, compared to PayPal’s 12.35X.
Zacks Investment Research
Image Source: Zacks Investment Research
Price Performance Comparison
Over the past month, shares of Visa have outperformed PayPal and the S&P 500 Index.
Price Performance – V, PYPL & S&P 500
Zacks Investment Research
Image Source: Zacks Investment Research
Conclusion
Both Visa and PayPal are iconic players in the digital payments space, but Visa holds a distinct edge in the race for global expansion. Its unmatched scale, high-margin business model and deeply rooted international presence make it a more reliable and diversified bet for investors. While PayPal remains a strong player in the digital wallet space, its growth is comparatively more localized and subject to greater volatility.
For investors seeking long-term exposure to the secular trend of global digital payments, Visa offers stronger fundamentals, broader global integration and more consistent financial performance. As such, Visa appears to have a better hand at the moment, even though both companies currently carry a Zacks Rank #3 (Hold) each.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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