Payments and FinTech Quarterly Review
Volume 2, Issue 1: First Quarter of 2026
This report should be read in conjunction with my earnings recap published here:
The Big Picture
With few exceptions, volume and revenue growth remained steady or improved across payments and fintech during Q1. Fiserv’s reset, which is set to lap in H2 2026, continues to be a drag on legacy acquiring and bank technology revenue growth. Outside of it, bank technology revenue growth remains healthy (above 7%) and—although slowing modestly in Q1—legacy acquiring revenue growth remains in the mid-single-digits.
Many of the key themes of the recent past remain in place:
Significant value-added services expansion compliments high single-digit volume growth to drive organic net revenue growth in the low-teens for Visa and Mastercard.
International markets represent a meaningful driver of volume and revenue growth for commerce platforms.
Aggregate take rates for SMB providers remain relatively steady.
Loss rates remain contained across the board.
The proliferation of lending drives substantial revenue growth across payments and fintech:
Merchant cash advance revenue—where disclosed or reasonably estimated—increased 27%
EWA and short-term liquidity products revenue increased 114%
BNPL revenue increased 38%
Publications Update
Below are my recent publications:
Payments and FinTech Earnings Recap: Q1 2026
Affirm: Better, But Is It Good?
Q1 2026: Portfolio Update + Investable Universe
Adyen: Much ado about nothing…or something?
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
Underlying Growth Remains Healthy
Reported debit card payment volume1 increased 5.2% during Q1, a 20-bps improvement from Q4. The conversion of the Capital One debit portfolio to Discover negatively impacted growth by at least 180-bps. Overall, I estimate underlying debit card payment volume growth of 7.7%.
Visa reported 6.7% growth (up 80-bps) and Mastercard 1.4% growth (down 100-bps).
Excluding the Capital One conversion, Mastercard indicated gross dollar volume (which includes both payment volume and cash withdrawals) growth would have been approximately 6.5% higher, implying about 8% payment volume growth.
Collectively, J.P. Morgan, Bank of America, and Wells Fargo (all exclusive, or near-exclusive, debit customers for Visa) grew 7.9% during Q1 (up 150-bps vs. Q4). This is the first time in my data set the largest issuers outgrew the market.
I estimate all other issuer volume grew 7.6% in Q1, up 20-bps from Q4.
In addition to regional and community banks and credit unions, other debit issuers include FinTech banks such as Chime and Cash App.
While Chime’s overall card payment volume grew 12% during Q1, down 1-point from Q4, credit makes up an increasing portion (23% in Q1 vs. 16% a year ago), implying debit payment volume growth of only about 3%. If I adjust for this, all other issuer volume grew 7.8%.
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
Strongest Growth Since 2023
U.S. credit card payment volume increased 8.4% during Q1, a 160-bps increase vs. Q4, the highest level of growth since Q1 2023.
Adding U.S. BNPL GMV and liquidity product originations to U.S. credit card payment volume raises the pro-forma growth rate by 80-bps during Q1 to about 9.2%, suggesting FinTechs are playing a key role sustaining healthy spending growth in the U.S., especially among low-to-middle income consumers.
Visa grew fastest at 9.6%, followed by Mastercard (8.0%) and American Express (7.2%) — Discover volume increased slightly vs. prior year.
This was the eleventh consecutive quarter American Express failed to gain share of the U.S. credit card market.
Among major issuers, J.P. Morgan gained share, growing 8.7%, up 140-bps vs. Q4. Capital One (8.0%, up 180-bps), Bank of America (5.4%, up 160-bps) and Citi (6.2%, up 140-bps) all showed similar acceleration.
Average credit card loans2 increased 4.8% in Q1, up 30-bps vs. Q4.
The Q1 net charge-off rate3 rose to 3.85%, up approximately 18-bps from Q4 but down 46-bps vs. the prior year period, a bigger decline than 35-bps during the past two quarters.
Networks
Tracking
Volume, processed transactions, and net revenue4 for Visa and Mastercard
Value Added Services Growth Remains Robust
Aggregate global payment volume (PV) for Visa and Mastercard increased 8.9% during Q1, a 50-bps improvement from Q4.
International PV increased 10.2%, a 10-bps improvement from Q4, while reported U.S. PV grew 7.1%, a 110-bps improvement from Q4. Excluding the Capital One version, I estimate underlying U.S. PV grew 8.4% during Q1.
Global processed transactions of 109.88 billion, grew 9.1% during Q1, down 20-bps from Q4.
Aggregate organic net revenue growth for Visa and Mastercard was about 13.7% during Q1, up 30-bps from Q4. For the first time in 13 quarters, Visa’s organic net revenue growth outpaced Mastercard’s.
Value added services (VAS) revenue continues to lead the way, with Visa and Mastercard reporting 27% and 18% (organic) growth in VAS revenue during Q1, respectively, both down about 1-point from Q4. VAS revenue represented 34.5% of aggregate Visa and Mastercard net revenue in Q1, up 240-bps over the prior year period.
Although still below last year’s elevated levels, FX volatility was higher-than-expected during Q1, providing a boost to Q1 results.
Visa reported organic net revenue and global PV growth of 15% (up 2-points) and 9%, respectively.
U.S. and international PV growth was 8% and 10%, respectively.
Processed transaction and cross-border volume (excluding intra-Europe) growth of 9% and 11%, respectively, stable with Q4.
Mastercard reported organic net revenue and global PV growth of 12% (down 2-points) and 9%, respectively.
U.S. and international PV growth was 5% and 11%, respectively.
Switched transactions increased 9%, down 1-point from Q4, while cross-border volume grew 13%, a 1-point slowdown from Q4.
Legacy Acquiring
Tracking
Volume, revenue and take rate for Fiserv, Global Payments, Worldpay, U.S. Bank’s Elavon and J.P. Morgan
Revenue Growth Ticks Down Across Board
Aggregate revenue growth for Legacy Acquiring slowed to less than 3% during Q1, a 100-bps decline from Q4. Fiserv slowed by 160-bps, pro-forma Global Payments + Worldpay and U.S. Bank’s Elavon each slowed by 70-bps.
In its first quarter following the acquisition of Worldpay, Global Payments reported organic revenue growth of 4.5% in Q1, down 1.5-points from Q4. On a pro-forma basis, the slowdown was approximately 70-bps. Global provided little detail about the composition of its performance given the recent close of the acquisition, but plans to beginning in Q2.
Fiserv’s Merchant organic revenue growth turned negative during Q1 (-1%), down 2-points from Q4. The absence of nonrecurring revenue slowed Clover revenue growth to 6% (down 6-points but up mid-teens on a year-over-basis excluding it) and non-Clover revenue fell 2.5%. Despite this, underlying volume growth for Clover improved 3-points to 12% and total SMB volume growth across Fiserv’s merchant franchise remained stable at 7%, providing a base to return to respectable revenue growth in H2 2026.
Commerce Platforms
Tracking
Revenue and Volume Growth Improves to Around 20%
Aggregate Commerce Platforms revenue grew 19% in Q1, a 2-point acceleration from Q4, in-line with Commerce Platforms volume growth, which also improved by 2-points to 20% in Q1.
All Commerce platforms reported an acceleration in volume growth with the exception of Toast, whose Q1 volume growth of 22% was level with Q4.
Commerce Platforms payments-related revenue increased 16% (up 1-point) while non-payments revenue (fees from software subscriptions and merchant lending primarily) grew nearly 22% (up 2-points).
Meaningfully lower year-over-year take rates at Square and Clover were the primary contributors to the spread between payments-related revenue and volume growth. However, based on the evidence, the pressure was not primarily pricing-based, but rather due to company-specific factors: Square is incurring higher processing costs to gain flexibility with a processing partner and moving upmarket, and Fiserv suggested Clover’s processing revenue was in-line with volume growth, implying the moderation in non-VAS Clover revenue growth was due to lower nonrecurring revenue.
Square’s volume, or GPV, grew 13% on a reported basis in Q1, up 3-points from Q4—but up only approximately 1-point on a constant currency basis. U.S. GPV grew 8.2%, up 120-bps from Q1. International GPV grew 26% on a constant-currency basis, up 1-point. Food and beverage GPV growth accelerated by 5-points to 21%, nearly matching Toast’s growth. Square’s gross profit grew 9%, or 11% excluding hardware costs. I estimate Square’s net take rate fell approximately 7-8-bps vs. the prior year, with about an equal contribution from the processing partner impact and Square’s move upmarket.
Toast’s volume growth slowed by 20-bps to 21.6% during Q1 as GPV per location fell by 1%. Revenue growth remained relatively stable at 26.1% (down 40-bps), with the spread between revenue and volume growth due primarily to ongoing mid-single-digit growth in SaaS ARPU and expansion in the payments net take rate.
Clover’s reported volume, or GPV, growth improved 3-points to 9% in Q1. Excluding the gateway conversion, volume grew 12%, also up 3-points from Q4. Revenue growth continued to slow, falling to 6%, down 6-points vs. Q4. VAS revenue grew 18%, reaching 27% of Clover revenue, up 3-points from the prior year period. Non-VAS revenue grew in the low single-digits as nonrecurring revenue fell and processing revenue increased 10%, in-line with reported volume growth.
Shift4 Payments reported volume growth of 24%, up 1-point from Q4—although with acquisition contribution (Smartpay and Bambora) and FX, volume growth may have slowed on an organic basis. Shift4’s blended spread, or take rate, was 61-bps during Q1, bouncing back 4-bps from Q4 and flat on a year-over-year basis. Shift4 disclosed organic revenue (GRLNF) growth of 11% in Q1, down approximately 1-point from Q4 based on my estimate.
E-Commerce
Tracking
Volume7, revenue and take rate for PayPal, Shopify and Adyen
Volume Growth Accelerates with Mid-Teens Growth for Braintree
Aggregate E-Commerce revenue grew 11% in Q1, a 2-point increase from Q4.
Shopify and Adyen represent more than 36.5% of aggregate E-Commerce revenue, up nearly 550-bps from the prior year.
Aggregate E-Commerce volume grew approximately 20% on a local currency basis during Q1, up about 3-points from Q4.
PayPal’s volume, or TPV, increased 8% on an FXN basis in Q1, a 2-point increase from Q4. Excluding P2P, volume was up 13% on a reported basis, reflecting acceleration in Braintree’s growth to the mid-teens—a large, but less profitable, volume stream for PayPal. Branded online checkout volume growth ticked up to 2% during Q1. Transaction margin dollars rose 2.5% in Q1, similar to Q4. Revenue for PayPal—which I define as revenue less transaction expense—grew 2.5%, up more than 1-point from Q4.
Adyen’s net revenue grew 20% on a constant-currency basis in Q1, a 1-point improvement from Q4. Volume growth was 21% on a reported basis. Adjusting for foreign currency, I estimate underlying constant-currency volume growth of approximately 25%, up a couple points from 2025.
Shopify’s GMV grew 30% on an FXN basis in Q1, up 1-point from Q4 and in a similar 29-30% band as the last three quarters. Revenue—which I define as merchant gross profit plus subscription revenue—grew 31% during Q1, up a full 7-points from Q4, reflecting an acceleration in subscription revenue growth and an improvement in merchant gross margin. Shopify’s merchant gross margin of 39% improved 20-bps over the prior year period compared to an average decline of 130-bps over the last six quarters prior to Q1. I attribute the improved margin performance to an acceleration in high-margin merchant cash advance revenue (up 47% in Q1), a smaller decline in the payments net take rate, and a favorable mix or improved pricing on transaction fees on GMV not processed by Shopify Payments.
FinTech Banks
Tracking
Revenue, active members, volume8 and short-term liquidity origination volume for Cash App, Chime, Dave, The Bancorp Bank and Green Dot
Lending Expansion Drives Significant Revenue Growth
Aggregate FinTech Bank revenue grew 37% during Q1, a 3-point acceleration from Q4. Volume growth of 18% accelerated by approximately 1-point.
Cash App gross profit, excluding Bitcoin, grew 40% during Q1, a 5-point improvement from Q4 despite a moderate slowdown in other key metrics like primary banking actives (from 22% to 18% growth) and Cash App total inflows (from 15% to 14%). More profitable lending streams continue to be the catalyst for accelerating Cash App gross profit growth. Borrow originations sustained hyper-growth, increasing 175% year-over-year. Finally, post-purchase BNPL, which is highly profitable for Cash App, has scaled faster than any other lending product in Block’s history, contributing to meaningful acceleration in overall BNPL GMV growth.
Chime’s revenue increased less than 25% during Q1, down 70-bps from Q4. Card purchase volume growth slowed 100-bps to 12.1%. Payments revenue, which represents interchange fees on card purchase volume, grew 15.3%, outpacing purchase volume growth due to a mix shift toward higher yielding secured credit transactions, but still slowed 150-bps vs. Q4. Platform revenue grew 50% in Q1, up 3-points from Q4’s increase. In Q1, MyPay, outbound instant transfers, and Instant Loans combined to represent nearly two-thirds of platform revenue, up from less than 50% during the prior year.
Buy Now, Pay Later
Tracking
Revenue and volume for Affirm, Afterpay, Klarna, PayPal, Sezzle and Zip
GMV and Revenue Growth Improves Further
Aggregate BNPL GMV was $68.7 billion in Q1, up 27%, a 2-point improvement from Q4.
I estimate U.S. BNPL GMV of approximately $37 billion during Q1, up 35% from the prior year.
Aggregate BNPL revenue grew 38%, a 5-point acceleration from Q4.
BNPL providers are driving attracting volume and revenue growth through the expansion of financing and payment options, as well as by partnering with payment service providers (PSPs) and digital wallets to increase the number of merchants and consumers utilizing their solutions.
Affirm’s revenue grew 33%, a 3-point improvement from the December quarter, as GMV growth of 35% ticked down only slightly (1-point). Revenue less transaction costs (RLTC) increased 41%. As a percentage of GMV, RLTC was 4.31%, up 19-bps vs. the prior year, driven by an ongoing improvement in funding costs. The Affirm Card generated $2.1 billion of GMV in the quarter.
Klarna reported GMV and revenue growth of 33% and 44%, respectively. On a like-for-like basis (LfL), GMV increased 22% (down 1-point) and revenue grew 36%, a 4-point improvement from Q4. U.S. GMV increased 39% with revenue growth accelerating to 68%. Klarna’s transaction margin dollars (TMD) grew 34% LfL and as a percentage of GMV expanded by 8-bps over the prior year to 1.15% during Q1.
I estimate Afterpay’s GMV growth reached 38% during Q1, up 14-points from Q4, due to significant adoption of post-purchase BNPL on Cash App Card transactions, Block’s most successful lending product launch ever.
Corporate Payments
Tracking
Volume and revenue9 for BILL Holdings, Corpay, AvidXchange and Payoneer
Mid-Teens Revenue Growth Persists
Aggregate Corporate Payments revenue grew 14.8% in Q1, a 10-bps improvement from Q4. Volume growth of 21.4% slowed 2-points from Q4 but is being influenced by a single enterprise customer that generates a significant amount of lower-yielding revenue.
Corpay’s organic revenue growth of 15.6% in Q1 was essentially unchanged vs. Q4. Organic spend volume growth fell by 10-points but continues to be heavily influenced by volume from a single enterprise customer where Corpay generates a lower revenue yield. Excluding float compression, Corpay’s organic revenue grew 18%, similar to Q4.
BILL Holdings’ core revenue, which includes transaction and subscription fees, grew 15.9% during the March quarter, down 1.5-points from the December quarter, as total payment volume growth ticked down 80-bps to 11.7%. Transaction fees growth slowed to 17.5% (down about 2.5-points) but subscription fees growth improved to more than 9% (up about 2.5-points). By solution, AP/AR revenue growth remained steady at a little less than 12% while spend and expense revenue growth slowed by about 3-points to 21%.
Bank Technology
Tracking
Revenue from Fiserv, FIS, Jack Henry, nCino, Q2 Holdings, and Alkami Technology
Outside of Fiserv, Growth Remains Healthy
Aggregate Bank Technology revenue grew 1.1% in Q1, down 210-bps from Q4. Excluding Fiserv, growth would have been 7.2%.
Fiserv’s Financial Solutions revenue fell 6% on an organic basis with weakness across digital payments (-5%), issuing (-6%), and banking (-6%) despite underlying stability in key drivers: low double-digit network volume growth, global accounts on file up low single-digits, and total accounts up 6% inclusive of Finxact. Select pricing changes and the absence of nonrecurring revenue account for the discrepancy between organic revenue growth and key drivers. Fiserv expects Q2 to be the trough for Financial Solutions with growth improving in H2 2026—more in-line with key drivers—before reaching 2-4% during 2027-2029.
Jack Henry’s organic revenue growth was 7.3% during the March quarter, a 70-bps improvement from the December quarter. Across segments, Core revenue increased 9% (due in part to the inclusion of some non-recurring revenue), Payments grew 5% (a tick down due to lower network incentives), and Complementary expanded 7%. Jack Henry noted consolidation at one of its competitors (i.e., Fiserv) has positively impacted its sales pipeline across Core, Payments and Complementary solutions, with its win rate likely to improve over time. Through the first three quarters of fiscal 2026, Jack Henry has 43 core wins versus 28 in the prior year period. Additionally, 58% of core wins are attaching digital banking and card processing this year versus only 29% a year ago.
As always, thank you for reading, and if you’ve enjoyed this, please consider sharing, liking, commenting or subscribing!
Disclosure: As of May 31, 2026, of the stocks mentioned in this report and across payments and fintech, I am long Visa, Global Payments, Intuit, Block, Adyen, Shift4 Payments, Paychex, Mastercard, and Broadridge Financial. This report is for informational purposes only and is not a recommendation to buy or sell any stock. Finally, while I rely on the information in this report to guide my investment decisions, you should not, because I cannot guarantee its accuracy.
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.
Visa and Mastercard report revenue on a net basis with client incentives deducted from gross revenue
Shopify represents gross merchandise volume and Lightspeed represents gross transaction volume.
Revenue includes payments or merchant transaction gross profit plus subscription revenue. I exclude hardware sales where possible.
Shopify represents gross merchandise volume.
Chime is card purchase volume. Cash App is commerce enablement volume excluding Cash App GPV. The Bancorp Bank is prepaid and debit card gross dollar volume.
Revenue excludes interest on client funds for Bill and AvidXchange.
Hi Bob,
Great to connect! I've really enjoyed reading your analysis on payments and fintech. Your fundamental, long term perspective on payment companies and fintech stocks offers a refreshing level of depth.
I also write about fintech, payments, digital banking, crypto, and blockchain, though my focus is more on industry trends, infrastructure, and emerging technologies. I've subscribed to your Substack and look forward to following your insights.
I'd love for us to support each other's work by engaging with our content. If there's an opportunity to collaborate down the line, I'd be happy to explore it.
Finally got around to reading this. Fantastic work. Should we be paying more attention to $SHOP? Business seems to be running on all cylinders.