The fintech industry is set to expand rapidly in the coming years, driven partly by the increasing prevalence of e-commerce and the ongoing demand for seamless payment solutions. Investors looking to take advantage of this trend may find compelling opportunities by selecting well-positioned companies with strong fundamentals and growth potential. Among the notable players, Adyen and PayPal emerge as two fintech firms with promising long-term outlooks despite recent periods of underperformance.
Adyen: Simplifying Payments with an Integrated Platform
Adyen has carved out a distinctive niche by providing businesses with a unified payment platform that streamlines acceptance of both online and in-person transactions across multiple geographic regions. This capability eliminates the need for companies to engage several separate providers, simplifying their operations. The firm's platform has attracted a range of multinational clients, including recognizable names such as Etsy, Spotify, and McDonald's.
However, Adyen's stock performance has largely remained flat in recent years, influenced by two main factors. Initially, the company benefited from heightened activity during the pandemic's onset, which boosted revenues and drove stock prices higher. This surge, however, proved temporary as market conditions normalized. Additionally, despite emerging economic challenges leading many corporations to reduce expenditures, Adyen increased its own spending, resulting in compressed profit margins.
The company has taken measured steps to address these margin pressures. In the first half of 2025, Adyen reported a 20% increase in net revenue year-over-year, reaching 1.1 billion euros (approximately $1.3 billion). Additionally, the company improved its EBITDA margin to 50%, up from 46% a year prior. Net income rose by 17% over the same period, totaling 481 million euros.
Adyen continues to be a profitable entity within fintech, supported by solid margins and a robust economic moat. This moat is largely attributable to customer switching costs; given the complexities of integrated payment systems, clients face significant disruptions if they migrate to alternative platforms. The company's growth prospects are enhanced by its ongoing expansion into the U.S. market and an increasing focus on large-format retail customers, a segment that had not been a major target previously.
PayPal: Leveraging a Deep Ecosystem Amid Challenges
PayPal has faced its own set of hurdles in recent years, with financial results and user growth falling short of expectations. Nevertheless, two compelling considerations suggest the company could rebound and perform well over the next decade.
First, despite modest growth in active user accounts—just a 1% year-on-year increase to 438 million in the third quarter—PayPal's payment processing volume climbed 8% annually to $458.1 billion. The company's extensive user base positions it well to expand monetization avenues.
One such avenue is PayPal's entry into digital advertising, leveraging its substantial amounts of transactional and consumer preference data to efficiently target potential customers. The launch of initiatives like PayPal Ads Manager, aimed at helping small businesses run effective advertising campaigns, as well as platforms offering companies enhanced insights into consumer purchasing behavior, demonstrate strategic moves to cultivate a large audience for its advertising platform and generate significant revenue streams.
Second, PayPal benefits from strong brand recognition and consumer trust, a critical advantage in the competitive fintech landscape. As a pioneer in online payments, its brand is closely associated with secure and reliable service. This reputation will likely aid PayPal as digital wallets and fintech solutions become more mainstream, potentially enabling the company to benefit significantly from industry expansion over the next decade.
Conclusion
While both Adyen and PayPal have encountered difficulties in recent years, their underlying business models, growth initiatives, and market positioning provide them with the tools necessary to capitalize on the anticipated fintech industry growth through 2036 and beyond. Investors considering long-term exposure to fintech may find these companies to be compelling choices based on their competitive advantages and strategic directions.