Wall Street doesn’t officially have any sectors named after the end-of-year holidays, but don’t let that fool you.
The 2025 Thanksgiving/Christmas/New Year’s season is a cash cow worth an estimated $1 trillion, according to the National Retail Foundation, up from $976 billion in 2024, a 4.2% rise from year to year.
That’s a ton of cash with a good portion generated in one sector that Wall Street does follow: banking and payments. With AI-powered financial technology firms flourishing and digital payments becoming the coin of the realm among millions of consumers and businesses, the holiday season is a great time to look at the online payments industry.
“BNPL \[Buy Now, Pay Later\] and digital payments see a boom at this time of year,” said Michael William Beer, director of engineering, crypto, and ads at the marketing platform company Whop. “That’s especially BNPL, since pressure to buy goes up, but people’s income generally stays the same. From a technical standpoint, the surge in traffic tests the sturdiness of these digital payment providers at scale.”
For digital payment providers, risks are present as the holiday season is less about transaction volume and more about managing surges in customer service requests. “When sales volumes triple, so do issues like failed payments, accidental double charges, and refund questions,” said Scott Bialek, co-founder at Hurst Lending , a Dallas-based financial services company.
Even so, as this year’s NRF data indicates, digital payments keep growing steadily every year, and the holiday season really highlights that.
“Globally, November and December make up about 15–20% of total retail sales, so it’s a busy time for everyone in the sector,” said Nikita Zelezkins, chief operating officer at Noda, a global online payments company. “For payment providers and BNPL companies, this period is both exciting and challenging. Transaction volumes can spike dramatically, and your operations should be prepared for that. This year, for instance, (digital payments provider) Adyen claimed to have processed $43 billion over Black Friday and Cyber Monday alone, up 27% from the year before.”
At Noda, an open banking payment platform, Zelezkins said he’s seen this rising trend firsthand with the company’s travel and e-commerce clients.
“Surely, different markets behave differently, as around 40% of UK holiday shopping happens online, versus 30% in the US, and 19% in Germany,” he noted. “But across the board, both online and offline spending is steadily rising. The holidays really test the resilience of payments infrastructure, and those who handle it well can turn this busy season into real growth.”
3 Digital Payments Stocks to Play the Busy Holiday Season
While you can’t judge a payment stock on six weeks of a 52-week yearly calendar, you can focus on sector stocks that are favored by consumers and businesses when they’re spending the most. These three stocks qualify on that front.
Visa (NYSE: V)
Bialek said he’s sticking with Visa, up 3.5% for the year, a payments company with strong fundamentals that investors can count on if the economy falters, as expected, in 2026.
“It isn’t the most exciting pick, but it just makes money,” Bialek said. “Think of Visa like a digital toll road. Every time someone swipes a card, the company takes a tiny cut. They don’t lend money, so they don’t take the same risks that banks do. Plus, inflation actually helps them. When prices go up, the transaction fees go up too.”
Visa is currently the top financial payments stock according to J.P. Morgan analysts, who see the company transitioning into the blockchain-powered finance realm, giving it broader exposure to new markets. Still, it’s the nuts and bolts that Visa has mastered, and investors crave reliability.
“While everyone else chases the newest fintech startup or crypto app, Visa just keeps processing billions of transactions every day,” Bialek noted. “That kind of reliability is hard to beat in this market.”
Paypal (NASDAQ: PYPL)
The boost from Black Friday, Cyber Monday, and extended seasonal offers tends to lift transaction volumes, which benefits payment processors, digital‑wallet providers, and BNPL platforms. However, the upside depends on user uptake and credit‑loss trends.
Among publicly traded names, PayPal stands out as a plausible beneficiary of this holiday momentum. “PayPal offers a broad payments ecosystem and a BNPL product that remains competitive,” said Michael Foote, founder of Quote Goat, an insurance, financial, and energy services platform, and an ex-HSBC executive. “Holiday‑driven transaction increases could strengthen its volumes, especially if BNPL demand rises.”
PayPal shares are down over 27% in 2025, but that scenario should be temporary. The company is making significant strides in agentic commerce, forging alliances with heavyweights like OpenAI and Google (NASDAQ: GOOG). Those deals likely won’t pay off until 2027, but strong profitability and a network of 434 million active users should buy PayPal plenty of time, with its Venmo person-to-person payment platform adding another sharp quiver in PYPL’s bow.
Block (NYSE: XYZ)
Block (formerly Square Inc.) is rolling out an ambitious three-year financial forecast that includes a $5 billion share buyback program, a move that has historically boosted confidence among shareholders who likely appreciate the share price support. It also calls for $32.8 billion in revenue by 2028, according to company officials.
Block also boasts high-profile brands like Cash App and Square in the peer-to-peer payments sector and merchant market point-of-sale, giving shareholders a robust foundation for financial services growth. While much depends on the execution of the economic plan, particularly in key areas like buybacks, growth targets, and product and service expansion, Block stands out as a resilient payments industry disrupter trading at a significant discount to its future growth potential.
“Block combining merchant payments, wallet services, and (via acquisition) BNPL capabilities, may gain from both consumer spending and merchant‑side volume spikes,” Foote noted.
Currently trading at $62 per share, Block is betting on both organic growth and shareholder return. For investors seeking exposure to the long-term digital payments revolution, Block offers the most diversified and underappreciated entry point among fintech firms right now.
Watch Out for Risks
While long-term growth looks promising, the digital payments sector faces some hurdles in the short term as the holidays fade.
“Macroeconomic uncertainty, inflation, and tighter household budgets could curb discretionary spending, which would blunt the benefit of higher transaction volume,” Foote noted. “Intensifying competition among fintech firms and traditional banks, putting pressure on fees and take rates, could squeeze profit margins even if volume rises.”
That said, the overall market, especially digital payments and ecommerce, is growing steadily year over year. “Large, established players may have the infrastructure and compliance experience to continue performing reliably,” Zelezkins said.
Investors should also look into BNPL, Zelezkins advised. “This payment method has grown much faster than traditional cards or digital wallets over the last 3-4 years, and it’s likely to remain a key driver of volume in both the short and long term,” he added.