The fintech landscape is undergoing a seismic shift as industry pioneers Block, Affirm, and PayPal—each born in distinct eras of Silicon Valley innovation—push beyond their original missions to become comprehensive digital banking platforms. Originally launched as Square, Block empowered small businesses with smartphone-based payment solutions. Affirm emerged as an online lender offering affordable installment loans for retail purchases.
PayPal, a trailblazer over 25 years ago, revolutionized online payments for merchants. Today, these fintech giants, founded by tech visionaries like Jack Dorsey and Max Levchin, are converging on a shared goal: to serve as all-in-one virtual banks for a digital-first audience. Their latest earnings reports, released this month, underscore these ambitions—and reveal the challenges ahead. Here’s an in-depth look at their strategies, performance, and the competitive fintech battlefield in 2025.
Block’s Bold Vision Meets Market Resistance
Block, formerly Square, reported its Q4 2024 earnings on February 20, 2025, delivering a mixed bag that sent its stock plummeting 18%—its steepest decline in five years. The company missed revenue and earnings estimates, raising concerns among investors. However, CEO Jack Dorsey painted a different picture during the earnings call, emphasizing Block’s evolution into a multifaceted financial ecosystem. “In 2024, we transformed Square from a payment tool into a full commerce platform, expanded Cash App’s financial services, and restructured our organization,” Dorsey stated.
Block’s strategy targets digital-native consumers—particularly Millennials and Gen Z—offering smartphone payments, peer-to-peer transfers via Cash App, credit and debit services, and bitcoin investment options. Despite stagnant growth in Cash App’s monthly active users (57 million), CFO Amrita Ahuja highlighted a focus on engagement over expansion. “We see significant long-term growth potential among digital natives,” she noted, citing deliberate banker-based strategies to deepen user interaction.
A key pillar of Block’s expansion is its buy now, pay later (BNPL) offerings, bolstered by its $29 billion acquisition of Afterpay in 2022. A recent Mizuho report shows Block’s BNPL market share rising to 19%, edging out Affirm’s steady 17%. This week’s integration of BNPL into Cash App further enhances its appeal, positioning Block as a direct competitor to Affirm in this lucrative space.
Affirm’s BNPL Dominance and Debit Card Push
Affirm, founded by PayPal co-founder Max Levchin, reported its earnings earlier this month, exceeding expectations and driving a 22% stock surge. The company posted a 35% increase in gross merchandise volume (GMV) to $10.1 billion and a 47% revenue jump to $770 million, with its active consumer base growing 23% to 21 million. Levchin’s vision of affordable, accessible credit continues to resonate, particularly in categories like electronics, jewelry, and travel.
Beyond BNPL, Affirm is expanding into debit services with the Affirm Card, which now boasts 1.7 million active users—a 136% year-over-year increase. “We’re personalizing the experience to make it the best alternative to traditional debit or credit cards,” Levchin said on the earnings call, setting a goal of 20 million users spending $7,500 annually per card. A new partnership with FIS aims to integrate Affirm’s debit functionality into traditional banks, broadening its reach.
PayPal’s Turnaround Gains Traction—With a Hiccup
PayPal, under CEO Alex Chriss since September 2023, is navigating a turnaround after years of turbulence post its 2015 eBay spinoff. The company’s 2024 stock performance impressed, climbing nearly 40%, though its latest earnings triggered a 13% drop despite beating profit and revenue forecasts. Total payment volume reached $437.8 billion—slightly below expectations—while transaction margins improved to 47% from 45.8%, signaling stronger profitability.
Chriss is focusing on monetizing platforms like Braintree and Venmo while expanding into physical commerce. Venmo’s total payment volume rose 10% year-over-year, driven by adoption at merchants like DoorDash, Starbucks, and Ticketmaster. New features like “Pay With Venmo” (up 20% in monthly active use) and Fastlane (a one-click checkout rival to Apple Pay) aim to boost merchant retention. PayPal Everywhere, a cashback initiative launched in 2024, is also driving debit card adoption, opening new spending categories.
The Fintech Convergence: A Digital Banking Race
Block, Affirm, and PayPal are united by a common realization: their original moats—payments, lending, and online transactions—aren’t enough to fend off competition. Growth lies in offering diverse financial services traditionally handled by banks, tailored to a generation that shuns physical branches. This digital-first cohort, accustomed to managing finances via apps, demands a seamless integration of payments, credit, and investments.
Yet, profitability remains a tightrope. Unlike banks burdened by branch networks, fintechs avoid such overhead but face intense competition in offering low-cost loans and attractive cashback. Compliance and underwriting costs further complicate the equation. Affirm’s Levchin emphasizes helping customers “spend less, not more,” while Block’s Ahuja underscores investments in compliance and identity verification to unlock broader financial tools for users.
Conclusion: A High-Stakes Evolution
The trajectories of Block, Affirm, and PayPal illustrate a fintech sector at a crossroads. Block’s ambitious diversification comes with execution risks, Affirm’s BNPL and debit momentum signals staying power, and PayPal’s turnaround shows resilience despite setbacks. As they converge on the virtual banking frontier, their success will depend on balancing innovation, engagement, and profitability. For digital natives, the future of finance is app-based—but which fintech will emerge as their go-to bank? Share your predictions below.
