Mastercard vs. Block: Which Digital Payment Stock Has an Edge?

As interest rates, travel demand, trade tensions, and consumer spending patterns reshape the financial environment, payment stocks are once again drawing investor interest as reliable long-term investments. At the same time, the rapid rise of Buy Now, Pay Later (BNPL) is transforming the payments ecosystem. Against this backdrop, which digital payments stock stands out—Mastercard Incorporated MA or Block Inc. XYZ?The Case for MastercardThe structural shift toward digital and cashless payments continues to be a powerful growth driver for Mastercard. As consumers and businesses steadily move away from cash, the company is well positioned to capture rising transaction volumes by leveraging its global network, continuous product innovation and advanced technology capabilities. Mastercard’s strong financial flexibility further enables it to fund organic growth initiatives while pursuing selective acquisitions that support long-term expansion.A key contributor to Mastercard’s resilience is its expanding value-added services portfolio, which includes data analytics, cybersecurity and consulting solutions. These services not only deepen client relationships but also diversify revenue streams, helping to stabilize earnings during periods of softer payment volumes.Management remains confident in the outlook for consumer and business spending. Accordingly, Mastercard expects fourth-quarter 2025 net revenues to grow at the upper end of a low double-digit range, while full-year 2025 net revenues are projected to rise in the low-teens on a currency-neutral basis, excluding acquisitions. Continued investment in strategic areas such as tokenization, cybersecurity, stablecoins, digital identity, open banking, and real-time payments strengthens Mastercard’s competitive positioning in a rapidly evolving payments landscape.Geographic expansion remains another important pillar of growth. Mastercard’s focus on emerging markets, particularly Southeast Asia and Latin America, aligns with its long-term strategy, as these regions feature large unbanked populations and increasing demand for digital payment solutions. The company is also allocating significant resources to artificial intelligence, fraud prevention and cybersecurity, enhancing trust and reinforcing its value proposition to clients.Mastercard’s robust balance sheet—with $10.4 billion in cash and no short-term debt—supports dividends, share buybacks and strategic investments. However, rising operating costs and higher rebates and incentives may temper upside, with adjusted operating expenses expected to grow at the high end of the mid-teens in 2025.The Case for BlockBlock distinguishes itself through an end-to-end commerce ecosystem that allows sellers to seamlessly integrate software, hardware and payment solutions within a single platform. This unified approach lowers complexity for merchants and strengthens customer loyalty. Block’s expansion into Bitcoin via Cash App further enhances its differentiation, positioning it at the intersection of traditional digital payments and emerging financial technologies.Block has continued to achieve key strategic milestones. Notably, it received FDIC approval to operate Square Financial Services earlier this year, strengthening its ability to offer banking and lending products directly to merchants. In addition, the rollout of Cash App Afterpay has expanded Block’s consumer offering by combining peer-to-peer payments with buy-now-pay-later functionality. Management has also signaled plans to invest aggressively in high return-on-equity growth initiatives across both Cash App and Square.Block’s diversified revenue base—spanning Cash App, Square, and Afterpay—provides resilience and supports its ambitions for international expansion. The company remains focused on accelerating growth across its core platforms and, assuming a supportive macroeconomic backdrop, expects to deliver consistent quarterly gross profit growth. Ongoing investments in partner relationships and broader distribution channels further strengthen Block’s long-term growth potential.A notable strategic advantage is Block’s ability to integrate Bitcoin into consumer-facing financial services, offering differentiation that many competitors lack. However, the stock continues to face pressure. Intensifying competition from fintech peers such as PayPal and Shopify threatens market share, while broader economic uncertainty—exacerbated by trade tensions and tariffs imposed by President Donald Trump on key partners including China, Canada, and Mexico—may weigh on performance. Additionally, weaker consumer spending in food, beverage and discretionary retail segments presents ongoing challenges for the business.Price Performance of MA and XYZMA shares have gained 10% year to date, while XYZ shares have lost 22.3% in the same time. Image Source: Zacks Investment ResearchEstimates for MA and XYZThe Zacks Consensus Estimate for MA’s 2025 revenues implies a 16.3% year-over-year increase and the same for EPS implies a 12.5% increase. EPS estimates have moved 1 cent south over the past 30 days.Image Source: Zacks Investment ResearchOn the contrary, the Zacks Consensus Estimate for XYZ’s 2025 revenues implies a year-over-year increase of 0.8% while the same for EPS implies a year-over-year decrease of 28.2%. EPS estimates witnessed no movement over the past 30 days.Image Source: Zacks Investment ResearchAre MA and XYZ Shares Expensive?MA is trading at a forward earnings multiple of 30.5, in line with its median over three years. XYZ’s forward earnings multiple sits at 19.6, below its median of 44.2 over the past three years.Image Source: Zacks Investment ResearchConclusionMastercard benefits from strong fundamentals, a growing digital payments ecosystem, and steady earnings, cementing its position as a global payments leader.Meanwhile, Block drives growth through Cash App, Square, and Afterpay, though increasing fintech competition and weaker consumer spending continue to put pressure on its stock performance.MA and XYZ carry a Zacks Rank #3 (Hold) each. However, MA’s price appreciation and near-term growth prospects place it ahead of XYZ.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Block, Inc. (XYZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks