Payments and FinTech Quarterly Review
Volume 1, Issue 1: First Quarter of 2025
Disclosure: Of the stocks mentioned in this report, I am long Visa, Global Payments, Shift4 Payments and Fiserv. I do not hold a position in any other stocks mentioned in this report.
Introducing the Payments and FinTech Review
This report offers key data for Payments and FinTech companies.
Areas include U.S. debit and credit card markets, merchant acquiring, commerce platforms, e-commerce, FinTech banks, buy now, pay later, and corporate payments. For additional data, please reach out, and I’ll try to accommodate.
U.S. Debit Card
Tracking
U.S. debit card payment volume for Visa, Mastercard and the EFT networks
Payment volume for the debit card portfolios of J.P. Morgan, Bank of America, Wells Fargo and U.S. Bank
Commentary
Total debit card payment volume1 rose 8% in Q1 2025, a 1% slowdown from Q4 2024, due to the leap day comparison. Everyday spending outperformed travel and entertainment, which is typically charged to credit cards.
Mastercard grew 9%, surpassing Visa's 7% growth.
Collectively, J.P. Morgan, Bank of America, and Wells Fargo grew 5%, below the market's 8% growth, implying others grew 9%.
U.S. Credit Card
Tracking
U.S. credit card payment volume for Visa, Mastercard, American Express and Discover
Payment volume for the credit card portfolios of J.P. Morgan, Capital One, Citi, Bank of America, U.S. Bank and Wells Fargo
Average loans and net charge-offs for the credit card portfolios of J.P. Morgan, Capital One, Citi, Bank of America, U.S. Bank, Wells Fargo, American Express and Discover
Commentary
U.S. credit card payment volume rose 5% in Q1 2025, down nearly 2% from Q4 2024, due to leap day comparison and weaker travel and entertainment spending.
Mastercard grew 6%, outpacing Visa and American Express at 5%. Discover fell 2%.
Among issuers, J.P. Morgan gained share, growing 7%.
Average credit card loans2 increased 6% in Q1 2025, consistent with Q4 2024.
The net charge-off rate3 rose 0.3% to 4.3%, aligning with historical seasonal patterns.
Merchant Acquiring
Tracking
Volume, revenue and take rate for Fiserv, Global Payments, Worldpay, U.S. Bank’s Elavon and J.P. Morgan
Commentary
Global Payments reported 6% volume growth, Elavon 4%, and Fiserv 3%.
Revenue growth matched volume growth, except for Fiserv, which reported 8% organic (and 5% adjusted) revenue growth versus 3% volume growth.
In April, Global Payments announced it was buying Worldpay for $24.3 billion. Global Payments believes a combination with Worldpay will create a formidable player in merchant acquiring. One with significant scale, diverse customers and distribution, a global footprint, and extensive capabilities. Investors are skeptical.
Merchant acquiring companies trade at low valuations: Global Payments at under 7x 2025 EPS and Fiserv at 15.5x. Despite mid-single-digit or higher organic growth, high margins, and strong free cash flow, investors fear intensifying competition from commerce platforms.
Commerce Platforms
Tracking
Commentary
Shopify and Toast achieved industry-leading organic volume growth of 25% and 22%, respectively.
Clover's volume growth fell to 8% in Q1 2025 from 14% in Q4 2024, but revenue growth remained strong at 27%. Shares of Fiserv dropped significantly after earnings due to the slower volume growth.
Take rates remain stable, with Shopify highest, followed by Square, then Shift4, Lightspeed, and Toast closer together.
E-Commerce
Tracking
Volume6 for PayPal, Shopify and Adyen
Commentary
Shopify’s Q1 2025 GMV increased 25%, consistent with Q4 2024.
PayPal's TPV, excluding P2P, rose 3%, and branded checkout increased 4%. Both slightly down from Q4 2024 as PayPal deliberately allows less profitable TPV to decline.
In 2024, Adyen's volume grew 33%, Shopify's 24%, and PayPal's 11%.
FinTech Banks
Tracking
Active members and card volume for Cash App Card, Chime, Venmo, Dave, The Bancorp Bank and Green Dot
Commentary
Chime's active members rose 23%, a slight increase from Q4 2024. Card volume grew 18%.
Dave observed steady 24% card volume growth despite slower active member growth.
Cash App Card monthly active users grew 4%, down from 9% in Q4 2024.
In 2024, Chime and Cash App Card accounted for about 4.4% of U.S. debit payment volume, up from 2.9% in 2022.
Buy Now, Pay Later
Tracking
Volume for Affirm, Afterpay, PayPal and Klarna
Commentary
Affirm reported a 36% GMV increase compared to Afterpay's 13%. PayPal reported over 20% growth in buy now, pay later TPV in Q1 2025.
Affirm, Afterpay, PayPal, and Klarna reported over $200 billion in buy now, pay later volume in 2024, up 19%.
Although Klarna is the largest, its share of total volume7 fell to 52% in 2024, down from over 74% in 2020.
Block introduced Afterpay for Cash App users in Q1 2025, expecting increased volume throughout the year.
Corporate Payments
Tracking
Volume and revenue8 for Bill Holdings, Corpay and AvidXchange.
Commentary
Aggregate volume from Bill, Corpay, and AvidXchange grew 12% in Q1 2025, consistent with recent quarters, except Q4 2024.
Corpay and Bill reported 19% and 14% organic revenue growth, respectively. AvidXchange's revenue growth dropped to 5%.
Corpay announced it is partnering with TPG to take AvidXchange private for $2.2 billion. Corpay will invest $500 million for a 33% equity stake, with an option to acquire 100% of AvidXchange in 2028. Adding AvidXchange increases Corpay's Corporate Payments revenue mix to 46%.
Includes quarterly Visa and Mastercard volume. Excludes EFT networks, estimated annually.
Represents the total average loans of J.P. Morgan, Capital One, Citi, Bank of America, U.S. Bank, Wells Fargo, American Express and Discover.
Represents the total net charge-offs for J.P. Morgan, Capital One, Citi, Bank of America, U.S. Bank, Wells Fargo, American Express and Discover.
Shopify represents gross merchandise volume and Lightspeed represents gross transaction volume.
Revenue includes payments or merchant transaction gross profit, excluding subscription fees for software or hardware sales.
Shopify represents gross merchandise volume.
Total volume from Affirm, Afterpay, PayPal and Klarna.
Revenue excludes interest on client funds for Bill and AvidXchange.