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5 Financial Transaction Stocks to Watch Despite Rising Tech Costs
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The Financial Transaction Services industry is likely to benefit from growing cross-border transactions, enabling expansion of digital ecosystems and service capabilities. Inflation and tariffs are tightening consumer budgets, which may inflict pressure on consumer spending despite being supported by a strong labor market and rising e-commerce. High technology expenses are climbing as firms invest in next-gen solutions like crypto, biometrics and QR payments to stay competitive. Cybersecurity costs are also surging due to rising threats of data theft and fraud, adding pressure to margins. To expand scale and build integrated ecosystems, companies are pursuing mergers and acquisitions (M&A) and tech investments, with potential Fed rate cuts in 2025 expected to lower financing costs and further accelerate strategic expansion. Companies like Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , PayPal Holdings, Inc. (PYPL - Free Report) , Fiserv, Inc. (FISV - Free Report) and Global Payments Inc. (GPN - Free Report) appear well-placed to counter industry headwinds.
About the Industry
The Zacks Financial Transaction Services industry is part of the Financial Technology or the FinTech space, including companies with diverse natures of businesses. The industry comprises card and payment processing and other solutions providers, ATM services and money remittance service providers, as well as providers of investment solutions to financial advisors. The players in this segment operate their unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use their products at millions of acceptance locations. Monetary transactions are done through these networks, offering a convenient, quick and secure payment method in several currencies across the globe. The industry is benefiting from the ongoing digitization movement triggered by the pandemic.
4 Key Trends That Shape the Fate of Financial Transaction Services Space
Elevated Technology Expenses: Technology costs are climbing as the worldwide move toward contactless payments keeps gaining momentum. To meet this surge in demand, major industry players are rolling out next-generation solutions such as cryptocurrency-based payments, biometric verification, QR-code transactions and Buy Now, Pay Later (BNPL) offerings. However, staying competitive and protecting market position now requires heavy and ongoing investment in digital infrastructure, pushing technology expenses higher. At the same time, the rapid adoption of digital payments has increased exposure to advanced cyber risks like data theft and financial fraud. To address these threats, companies are channeling significant resources into building more secure payment platforms and strengthening fraud-detection capabilities, which further adds to tech spending. While such investments should deliver long-term advantages, the near-term costs weigh on profitability and limit margin expansion for industry participants.
Pressure on Consumer Spending: Steady consumer spending implies increased utilization of financial transaction services, leading to higher transaction volumes and revenue growth for the industry participants. Though a booming e-commerce sector is expected to provide some respite to consumer spending levels, inflationary pressures and tariffs may pinch wallets and make shoppers increasingly price-conscious. According to the Mastercard Economics Institute, U.S. holiday retail sales, excluding autos, are anticipated to rise 3.6% year over year between Nov. 1–Dec. 24, 2025, slower than last season’s 4.1% gain. Nevertheless, a resilient labor market, along with low layoffs and steady wages, may help sustain spending in the days ahead.
Expansion in Cross-Border Transactions: Financial transaction service providers are strongly positioned to gain from the upswing in international trade, rising global travel and the increasing need for fast, dependable remittance options. Firms with sophisticated cross-border payment platforms stand out because they make international transfers smooth and help manage currency conversion efficiently. Such capabilities are essential for businesses to collect payments from overseas customers and pay global suppliers on time, keeping operations running without friction. At the same time, a growing worldwide workforce is adding to the demand for trusted cross-border remittance services.
Strategic Growth via M&A: To build comprehensive digital ecosystems, companies in the financial transaction services space often pair technology investments with M&A. These moves are crucial for boosting service capabilities, broadening operational scope, growing customer bases and reinforcing global market reach. In 2025, the Fed has cut interest rates twice and chances remain of implementation of another reduction at its December meeting. A lower-rate environment should motivate companies to use more borrowing to fund M&A activities, helping them conserve cash while continuing to pursue expansion.
Zacks Industry Rank Indicates Bearish Outlook
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates tepid near-term prospects. The Zacks Financial Transaction Services industry is housed within the broader Zacks Business Services sector. It currently carries a Zacks Industry Rank #153, which places it in the bottom 37% of more than 250 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one. The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate.
Despite the dismal scenario, we will present a few stocks that one can retain, given their solid growth endeavors. But before that, it is worth looking at the industry’s recent stock-market performance and the valuation picture.
Industry Underperforms Sector, S&P 500
The Zacks Financial Transaction Services industry underperformed its sector and the Zacks S&P 500 composite in the past year.
In the said time frame, the industry has declined 14.5% compared with the Business Services sector’s decline of 13.9%. The S&P 500 has rallied 12.4% in the same time frame.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the forward 12-month Price/Earnings ratio, commonly used for valuing financial transaction services stocks, the industry is currently trading at 19.93X compared with the S&P 500’s 22.79X and the sector’s 19.52X.
In the past five years, the industry traded as high as 37.08X, as low as 18.92X and at the median of 22.74X.
Forward 12-Month Price/Earnings (P/E) Ratio
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
5 Stocks to Keep a Close Eye on
We are presenting five stocks from the Financial Transaction Services industry that currently carry a Zacks Rank #3 (Hold). Considering the current industry scenario, it might be prudent for investors to retain these stocks in their portfolio as these are well-placed to generate growth in the long term.
Visa: Visa, based in San Francisco, is a major global powerhouse in digital payments. The company keeps expanding its footprint through new strategic alliances and renewals of long-standing deals. Solid momentum in Latin America, Canada and the United States has been a major contributor to overall growth. During the fourth quarter of fiscal 2025, cross-border volumes increased 12% from the prior year. Higher transaction levels have lifted processing fees, providing an added boost to revenues. Visa also continues to invest heavily in technology to strengthen and evolve its digital payments platform.
The Zacks Consensus Estimate for Visa’s fiscal 2026 earnings is pegged at $12.81 per share, indicating an 11.7% rise from the year-ago figure. V’s earnings beat estimates in each of the last four quarters, the average surprise being 2.73%.
Price and Consensus: V
Image Source: Zacks Investment Research
Mastercard: Headquartered in Purchase, the company operates a multi-rail infrastructure that supports card and real-time payments, offering consumers and businesses seamless, secure and versatile payment experiences. Its cross-border payments platform, Mastercard Move, facilitates secure and seamless international money transfers across more than 200 countries. Its subsidiary Recorded Future, recently broadened its collaboration with Exabeam to bring real-time, smart threat detection, investigation and automated response capabilities right to the forefront. The company has further reinforced its operational capabilities through notable acquisitions, including CipherTrace, Aiia, Vyze, Nets, RiskRecon, Dynamic Yield and Finicity.
The Zacks Consensus Estimate for Mastercard’s 2025 earnings is pegged at $16.44 per share, indicating an 12.6% rise from the year-ago figure. MA’s earnings beat estimates in each of the last four quarters, the average surprise being 3.09%.
Price and Consensus: MA
Image Source: Zacks Investment Research
PayPal: Headquartered in California, PayPal stands out by delivering digital payment options that are secure, easy to use and cost-effective. Its robust risk controls and tokenization technology help protect users and reduce fraud. Operating a two-sided network, PayPal brings together merchants and consumers to deepen engagement, provide valuable data insights and build reliable, trust-based relationships. The company has also broadened its international footprint and enhanced its services through partnerships with Visa, Mastercard, leading banks, and major technology players such as Google, Facebook and Alibaba. Adding to this strength, Venmo expands PayPal’s reach in mobile payments, supported by an expanding feature set and rising adoption among merchants.
The Zacks Consensus Estimate for PayPal’s 2025 earnings is pegged at $5.34 per share, indicating an improvement of 14.8% from the year-ago figure. PYPL’s earnings beat estimates in each of the last four quarters, the average surprise being 10.32%.
Price and Consensus: PYPL
Image Source: Zacks Investment Research
Fiserv: Headquartered in Wisconsin, Fiserv commands a strong competitive edge in digital payments through its comprehensive suite of solutions, including debit card processing, fraud mitigation, real-time payments and mobile-enabled services like CardHub and CheckFree RXP. Its ownership of major U.S. debit networks (Accel, STAR, MoneyPass) enhances transaction accessibility and scale. Leveraging AI for fraud prevention and efficiency further strengthens its position. The company is focused on delivering exceptional performance by acquiring new clients, deepening existing relationships and offering value-enhancing solutions. Fiserv’s growth strategy has been significantly shaped by acquisitions, such as those of Payfare and CCV, which have bolstered FISV’s embedded finance and POS offerings.
The Zacks Consensus Estimate for Fiserv’s 2025 earnings is pegged at $8.79 per share. The consensus mark for revenues implies a 4.4% improvement from the year-ago actual. FISV’s earnings beat estimates in three of the last four quarters and missed the mark once.
Price and Consensus: FISV
Image Source: Zacks Investment Research
Global Payments: The Atlanta, GA-based Global Payments is well-positioned for future growth, supported by solid performances in its Merchant Solutions and Issuer Solutions segments. The Merchant Solutions division stands to benefit from rising transaction volumes and an expanding base of U.S. merchant partners. At the same time, the Issuer Solutions segment is expected to gain momentum through the growth of core issuing clients. The company has enhanced its capabilities and extended its international reach through strategic acquisitions and alliances. Global Payments continues to prioritize substantial investments in technology, with a focus on product innovation, modernization and the migration of key platforms to cloud-based infrastructures.
The Zacks Consensus Estimate for Global Payments’ 2025 earnings is pegged at $12.21 per share, indicating an 5.7% rise from the year-ago figure. GPN’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 1.93%.
Price and Consensus: GPN
Image Source: Zacks Investment Research
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5 Financial Transaction Stocks to Watch Despite Rising Tech Costs
The Financial Transaction Services industry is likely to benefit from growing cross-border transactions, enabling expansion of digital ecosystems and service capabilities. Inflation and tariffs are tightening consumer budgets, which may inflict pressure on consumer spending despite being supported by a strong labor market and rising e-commerce. High technology expenses are climbing as firms invest in next-gen solutions like crypto, biometrics and QR payments to stay competitive. Cybersecurity costs are also surging due to rising threats of data theft and fraud, adding pressure to margins. To expand scale and build integrated ecosystems, companies are pursuing mergers and acquisitions (M&A) and tech investments, with potential Fed rate cuts in 2025 expected to lower financing costs and further accelerate strategic expansion. Companies like Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , PayPal Holdings, Inc. (PYPL - Free Report) , Fiserv, Inc. (FISV - Free Report) and Global Payments Inc. (GPN - Free Report) appear well-placed to counter industry headwinds.
About the Industry
The Zacks Financial Transaction Services industry is part of the Financial Technology or the FinTech space, including companies with diverse natures of businesses. The industry comprises card and payment processing and other solutions providers, ATM services and money remittance service providers, as well as providers of investment solutions to financial advisors. The players in this segment operate their unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use their products at millions of acceptance locations. Monetary transactions are done through these networks, offering a convenient, quick and secure payment method in several currencies across the globe. The industry is benefiting from the ongoing digitization movement triggered by the pandemic.
4 Key Trends That Shape the Fate of Financial Transaction Services Space
Elevated Technology Expenses: Technology costs are climbing as the worldwide move toward contactless payments keeps gaining momentum. To meet this surge in demand, major industry players are rolling out next-generation solutions such as cryptocurrency-based payments, biometric verification, QR-code transactions and Buy Now, Pay Later (BNPL) offerings. However, staying competitive and protecting market position now requires heavy and ongoing investment in digital infrastructure, pushing technology expenses higher. At the same time, the rapid adoption of digital payments has increased exposure to advanced cyber risks like data theft and financial fraud. To address these threats, companies are channeling significant resources into building more secure payment platforms and strengthening fraud-detection capabilities, which further adds to tech spending. While such investments should deliver long-term advantages, the near-term costs weigh on profitability and limit margin expansion for industry participants.
Pressure on Consumer Spending: Steady consumer spending implies increased utilization of financial transaction services, leading to higher transaction volumes and revenue growth for the industry participants. Though a booming e-commerce sector is expected to provide some respite to consumer spending levels, inflationary pressures and tariffs may pinch wallets and make shoppers increasingly price-conscious. According to the Mastercard Economics Institute, U.S. holiday retail sales, excluding autos, are anticipated to rise 3.6% year over year between Nov. 1–Dec. 24, 2025, slower than last season’s 4.1% gain. Nevertheless, a resilient labor market, along with low layoffs and steady wages, may help sustain spending in the days ahead.
Expansion in Cross-Border Transactions: Financial transaction service providers are strongly positioned to gain from the upswing in international trade, rising global travel and the increasing need for fast, dependable remittance options. Firms with sophisticated cross-border payment platforms stand out because they make international transfers smooth and help manage currency conversion efficiently. Such capabilities are essential for businesses to collect payments from overseas customers and pay global suppliers on time, keeping operations running without friction. At the same time, a growing worldwide workforce is adding to the demand for trusted cross-border remittance services.
Strategic Growth via M&A: To build comprehensive digital ecosystems, companies in the financial transaction services space often pair technology investments with M&A. These moves are crucial for boosting service capabilities, broadening operational scope, growing customer bases and reinforcing global market reach. In 2025, the Fed has cut interest rates twice and chances remain of implementation of another reduction at its December meeting. A lower-rate environment should motivate companies to use more borrowing to fund M&A activities, helping them conserve cash while continuing to pursue expansion.
Zacks Industry Rank Indicates Bearish Outlook
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates tepid near-term prospects. The Zacks Financial Transaction Services industry is housed within the broader Zacks Business Services sector. It currently carries a Zacks Industry Rank #153, which places it in the bottom 37% of more than 250 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one. The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate.
Despite the dismal scenario, we will present a few stocks that one can retain, given their solid growth endeavors. But before that, it is worth looking at the industry’s recent stock-market performance and the valuation picture.
Industry Underperforms Sector, S&P 500
The Zacks Financial Transaction Services industry underperformed its sector and the Zacks S&P 500 composite in the past year.
In the said time frame, the industry has declined 14.5% compared with the Business Services sector’s decline of 13.9%. The S&P 500 has rallied 12.4% in the same time frame.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the forward 12-month Price/Earnings ratio, commonly used for valuing financial transaction services stocks, the industry is currently trading at 19.93X compared with the S&P 500’s 22.79X and the sector’s 19.52X.
In the past five years, the industry traded as high as 37.08X, as low as 18.92X and at the median of 22.74X.
Forward 12-Month Price/Earnings (P/E) Ratio
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
5 Stocks to Keep a Close Eye on
We are presenting five stocks from the Financial Transaction Services industry that currently carry a Zacks Rank #3 (Hold). Considering the current industry scenario, it might be prudent for investors to retain these stocks in their portfolio as these are well-placed to generate growth in the long term.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Visa: Visa, based in San Francisco, is a major global powerhouse in digital payments. The company keeps expanding its footprint through new strategic alliances and renewals of long-standing deals. Solid momentum in Latin America, Canada and the United States has been a major contributor to overall growth. During the fourth quarter of fiscal 2025, cross-border volumes increased 12% from the prior year. Higher transaction levels have lifted processing fees, providing an added boost to revenues. Visa also continues to invest heavily in technology to strengthen and evolve its digital payments platform.
The Zacks Consensus Estimate for Visa’s fiscal 2026 earnings is pegged at $12.81 per share, indicating an 11.7% rise from the year-ago figure. V’s earnings beat estimates in each of the last four quarters, the average surprise being 2.73%.
Price and Consensus: V
Image Source: Zacks Investment Research
Mastercard: Headquartered in Purchase, the company operates a multi-rail infrastructure that supports card and real-time payments, offering consumers and businesses seamless, secure and versatile payment experiences. Its cross-border payments platform, Mastercard Move, facilitates secure and seamless international money transfers across more than 200 countries. Its subsidiary Recorded Future, recently broadened its collaboration with Exabeam to bring real-time, smart threat detection, investigation and automated response capabilities right to the forefront. The company has further reinforced its operational capabilities through notable acquisitions, including CipherTrace, Aiia, Vyze, Nets, RiskRecon, Dynamic Yield and Finicity.
The Zacks Consensus Estimate for Mastercard’s 2025 earnings is pegged at $16.44 per share, indicating an 12.6% rise from the year-ago figure. MA’s earnings beat estimates in each of the last four quarters, the average surprise being 3.09%.
Price and Consensus: MA
Image Source: Zacks Investment Research
PayPal: Headquartered in California, PayPal stands out by delivering digital payment options that are secure, easy to use and cost-effective. Its robust risk controls and tokenization technology help protect users and reduce fraud. Operating a two-sided network, PayPal brings together merchants and consumers to deepen engagement, provide valuable data insights and build reliable, trust-based relationships. The company has also broadened its international footprint and enhanced its services through partnerships with Visa, Mastercard, leading banks, and major technology players such as Google, Facebook and Alibaba. Adding to this strength, Venmo expands PayPal’s reach in mobile payments, supported by an expanding feature set and rising adoption among merchants.
The Zacks Consensus Estimate for PayPal’s 2025 earnings is pegged at $5.34 per share, indicating an improvement of 14.8% from the year-ago figure. PYPL’s earnings beat estimates in each of the last four quarters, the average surprise being 10.32%.
Price and Consensus: PYPL
Image Source: Zacks Investment Research
Fiserv: Headquartered in Wisconsin, Fiserv commands a strong competitive edge in digital payments through its comprehensive suite of solutions, including debit card processing, fraud mitigation, real-time payments and mobile-enabled services like CardHub and CheckFree RXP. Its ownership of major U.S. debit networks (Accel, STAR, MoneyPass) enhances transaction accessibility and scale. Leveraging AI for fraud prevention and efficiency further strengthens its position. The company is focused on delivering exceptional performance by acquiring new clients, deepening existing relationships and offering value-enhancing solutions. Fiserv’s growth strategy has been significantly shaped by acquisitions, such as those of Payfare and CCV, which have bolstered FISV’s embedded finance and POS offerings.
The Zacks Consensus Estimate for Fiserv’s 2025 earnings is pegged at $8.79 per share. The consensus mark for revenues implies a 4.4% improvement from the year-ago actual. FISV’s earnings beat estimates in three of the last four quarters and missed the mark once.
Price and Consensus: FISV
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Global Payments’ 2025 earnings is pegged at $12.21 per share, indicating an 5.7% rise from the year-ago figure. GPN’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 1.93%.
Price and Consensus: GPN
Image Source: Zacks Investment Research