Mastercard Incorporated MA and Affirm Holdings, Inc. AFRM are key players in the rapidly evolving digital payments industry, where demand for seamless, cashless and flexible payment solutions continues to grow. The expansion of e-commerce, digital wallets and installment-based financing is reshaping how consumers and merchants complete transactions.
While both companies are benefiting from this shift, they approach the market from different angles. Mastercard operates one of the world's largest global card payment networks, whereas Affirm has built its business around buy now, pay later (BNPL) financing and merchant partnerships. Their overlapping exposure to digital payments, combined with distinct business models and growth strategies, makes them compelling companies to compare.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which stock is more attractive now.
The Case for Mastercard
Mastercard's key growth engine remains the steady expansion of its payments network alongside its fast-growing value-added services business. In the first quarter of 2026, value-added services and solutions’ net revenues rose 22% year over year, outpacing the 12% growth in payment network net revenues as demand increased for cybersecurity, authentication, consumer engagement and analytics solutions. Cross-border volumes increased 13% year over year, while switched transactions grew 9%, reflecting healthy transaction activity despite geopolitical challenges.
MA is strengthening its presence in the BNPL market through Mastercard One Credential, which allows consumers to access multiple payment options — including debit, credit and installments — through a single credential. The company has expanded the offering through partnerships with SoFi, Fiserv and Blossom, making installment payments more accessible while giving banks and credit unions a flexible payment solution. It beat earnings estimates in each of the past four quarters, with an average surprise of 5.5%.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Mastercard is preparing its network for the next generation of digital commerce. Nearly all Mastercards are now enabled for Mastercard Agent Pay, while Verifiable Intent adds an extra layer of security for AI-driven transactions. The company is also expanding partnerships with OpenAI and Crossmint to support secure autonomous payments, positioning itself at the center of emerging agentic commerce.
Mastercard continues to integrate stablecoins across its ecosystem, including Mastercard Move and settlement capabilities, while the planned acquisition of BVNK is expected to strengthen its ability to send, receive, convert and hold stablecoins. This infrastructure can unlock new use cases in cross-border B2B payments, remittances and payouts without disrupting its core card business.
MA has continued broadening its digital payments ecosystem through new partnerships. The company recently introduced Open USD alongside leading financial and technology partners to simplify stablecoin adoption, expanded Mastercard Move's cross-border payment capabilities and rolled out additional AI-powered fraud prevention and cyber intelligence solutions. These initiatives complement its strategy of generating growth from both payment volumes and higher-value services.
However, the upside was partly offset by escalating operating expenses and higher rebates and incentives. In the first quarter of 2026, adjusted operating expenses rose 11% year over year. Its long-term debt-to-capital of 71.9% is higher than the industry’s average of 39.4% and AFRM’s average of 70.5%.
The Case for Affirm
Affirm continues to strengthen its position in the buy now, pay later (BNPL) market by expanding its merchant network and increasing consumer engagement. In the third quarter of fiscal 2026, gross merchandise volume (GMV) climbed 35% year over year to $11.6 billion, while revenues rose 33% to $1 billion, reflecting healthy consumer demand and higher merchant adoption. Total transactions grew 45% year over year in the third quarter of fiscal 2026.
The company's ecosystem is also benefiting from growing adoption of the Affirm Card, which combines debit functionality with flexible installment payment options. Unlike traditional BNPL products used only at checkout, the card enables consumers to access installment financing for everyday purchases, helping drive repeat usage and strengthening customer relationships beyond one-time transactions. AFRM’s active consumers increased 22% year over year to 26.8 million, while transactions per active consumer improved 20% to 6.7, indicating that customers are using Affirm's platform more frequently.
Affirm is broadening its reach through strategic merchant partnerships and platform integrations. The company recently added Bed Bath & Beyond, Overstock and buybuy BABY to its merchant network, extending financing options across major retail brands. It also continues to deepen relationships with large commerce platforms and payment providers, supporting sustained growth in merchant acceptance and payment volume. As of March 31, 2026, Affirm served approximately 515,000 active merchants, up 43.8% year over year, reflecting broad adoption across online and in-store commerce.
AFRM is also investing in technology and product innovation to diversify its business beyond traditional BNPL services. The company is leveraging artificial intelligence to improve customer experiences and operational efficiency while exploring opportunities in new markets and financial products. These initiatives, combined with its expanding merchant ecosystem and growing consumer base, are expected to support its long-term growth trajectory. It beat earnings estimates in each of the past four quarters with an average surprise of 74.9%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote
However, the expansion is accompanied by rising cost pressures, with total operating expenses increasing 20.1% year over year in the third quarter of fiscal 2026, primarily due to increased provisions for credit losses, losses on loan purchase commitments, funding costs, technology and data analytics expenses and elevated processing and servicing expenses.
How Do Estimates Compare for MA & AFRM?
Estimates are in favor of AFRM at this stage. The Zacks Consensus Estimate expects MA’s 2026 sales and earnings per share (EPS) to grow 12.9% and 15.4% year over year, respectively. For 2027, EPS is expected to climb another 15.6%.
Meanwhile, AFRM’s fiscal 2026 sales and EPS estimates point to 30.6% and 720% year-over-year increases, respectively, followed by a 39.2% EPS rise in fiscal 2027.
Price Performance Comparison
Over the past six months, Affirm outperformed Mastercard. Meanwhile, the S&P 500 has increased 7.4% during this time.
Price Performance – MA, AFRM & S&P 500
Image Source: Zacks Investment Research
Valuation: MA vs. AFRM
On a price-to-sales basis, MA sits at 12.02X forward revenues, significantly above Affirm’s multiple of 4.62X. AFRM’s cheaper P/S multiple leaves room for significant growth as business expansion accelerates.
Image Source: Zacks Investment Research
Price Target
Mastercard currently trades below its average analyst price target of $641.64, implying a 17.2% potential upside from current levels. Meanwhile, Affirm currently trades below its average analyst price target of $91.48, implying an attractive 21.5% potential upside from current levels.
Conclusion
Both Mastercard and Affirm are well-positioned to benefit from the continued shift toward digital payments, but their growth profiles differ significantly. While MA offers stability through its diversified payments ecosystem, AFRM stands out with faster revenue growth, stronger earnings momentum, a lower valuation and greater upside potential.
For investors seeking rapid future gains rather than stability, Affirm has the edge at the moment. While AFRM currently carries a Zacks Rank #2 (Buy), MA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).