Payments and fintech Report Interpretation

Overview

This report summarizes Goldman Sachs' payments and fintech conclusions from Communacopia + Technology 2026, held September 8-11 in San Francisco. After 20 fireside chats, two management dinners and numerous investor meetings over three days, the institution found spending and credit trends broadly resilient, identified renewed opportunity around card-based agentic commerce, and remained selective where competition or execution risks were more pronounced.

Core views

Goldman Sachs characterizes the overall conference readout as constructive. Consumer and business spending remained stable through August and broadly consistent with July run rates, while fintech credit quality and funding conditions stayed healthy. The report therefore sees the payments and fintech industry benefiting from consumer and macro tailwinds and remaining relatively defensive against inflation because payment revenue is linked to nominal spending. With core transaction volumes healthy, attention has shifted toward medium- and longer-term themes including agentic commerce, cybersecurity and, to a lesser extent, stablecoins. Agentic commerce returned to the center of investor discussion after the launch of Meta's Muse and Spear Street Technology's Instinct. The earlier 2026 debate had emphasized disruption from artificial intelligence and the possibility that stablecoins or other payment forms could displace cards. Goldman Sachs argues that the latest product designs are more constructive for incumbents because cards are central to both platforms. Adoption and agentic transaction volumes are still very small, but the report believes Visa and Mastercard can participate directly and also provide fraud-management and tokenization services. This should keep card-displacement fears contained for now. Open questions remain over whether BNPL's consumer-friendly terms gain an advantage, how wallets such as Stripe's Link and Shop Pay compete, and whether agentic acquiring becomes concentrated among modern e-commerce processors such as Stripe and Adyen. The underlying network data support that constructive stance. Visa said US spending volume grew 10% last quarter and was tracking at 9% quarter-to-date through August, broadly consistent with July. Global payment-transaction growth remained approximately 10% year over year, while cross-border volume accelerated from 12% last quarter to 14% through August on strong e-commerce trends. Mastercard likewise described the first four weeks of August as strong and stable versus July. Its cross-border travel and non-travel spending remained firm: outbound travel recovered better than expected despite Middle East disruption, while non-travel card-not-present volumes benefited from categories such as AI-platform subscriptions and digital-wallet funding. Goldman Sachs consequently identifies Visa and Mastercard as top picks because of spending resilience, value-added-services growth and their potential to benefit from agentic commerce. The processor conclusions are more differentiated. Shift4 flagged risk to fourth-quarter guidance from Middle East travel disruption and said interest expense and capital-structure effects would remain a free-cash-flow headwind in 2027. Management described a high-single-digit to low-double-digit organic revenue-growth algorithm with 60% incremental free-cash-flow conversion excluding capital-structure effects. Although the fourth-quarter risk was already in Goldman Sachs' prior estimates, the 2027 free-cash-flow comments and an organic-growth outlook around 10% led to modest estimate reductions. PayPal said de minimis and European tariff headwinds could reduce third-quarter branded-checkout growth to 1%-2%, below prior expectations, though management reiterated full-year transaction-margin and EPS guidance based on diversification and cost savings. Toast reported stable restaurant spending, while Goldman Sachs viewed commentary about the IQ suite as positive because management sees it increasing SaaS revenue per user and expanding platform revenue potential. Flywire's internal US enrollment data were better than its assumption of a 30% visa decline, and the volatile UK market was performing better than the slowdown embedded in second-half guidance. Bank-technology discussions centered on competition and cybersecurity. Jack Henry continued to show momentum with record core wins and planned to issue FY28 guidance at its September 15 investor day, along with FY29 revenue guidance—a change in its disclosure approach. Fiserv reiterated its guidance and medium-term framework, including a 1%-3% third-quarter revenue decline and an expectation that operating leverage returns to more normal levels in 2027; management did not expect technology or cybersecurity investments to prevent achievement of its margin targets. Fidelity National Information Services reaffirmed guidance and expects its Capital Markets business to accelerate in the fourth quarter of 2026 and modestly again in 2027 on both adjusted and recurring bases despite M&A headwinds. The wider strategic question is whether advanced AI models make cybersecurity primarily a near-term expense or a commercial opportunity: accelerated defensive spending could also encourage banks to migrate to secure private clouds and consolidate more technology spending with scaled providers. Fintech fundamentals were also healthy. Credit-product growth and BNPL share gains continued, credit quality remained benign, and funding markets were supportive. Goldman Sachs highlights Affirm and Klarna as preferred BNPL exposures and Chime and Block as consumer-fintech beneficiaries of deregulation and wallet-share gains. Nubank's planned US expansion renewed competitive concern, but the report views the US market as an incumbent-versus-challenger structure rather than a zero-sum contest. Building a US neobank franchise typically takes years, while Nubank's proposed multicurrency, rewards-card and high-yield-savings offering enters areas dominated by large banks and incumbent consumer-finance firms. Chime and Block appear less exposed because of their mass-market and near-prime positioning, although Klarna and Revolut are also expanding aggressively in the United States. Block said spending remained resilient through July and August across both ecosystems. Extending the Borrow product from four weeks to six weeks should increase variable-profit dollars and margins over time, but investors still lack clarity on the transition mechanics following higher transaction and loan-loss provisions. Chime reported continued credit-product outperformance and strong Chime Prime adoption, prompting a meaningful increase to third-quarter and full-year guidance. Its planned acquisition of Stride Bank could improve lending efficiency and funding costs through ownership of a bank charter, but investors are likely to seek detail on the source and timing of synergies. Remitly said India's regulatory disruption lasted two months rather than the three assumed in guidance. Nubank's free-remittance offering may weigh on Remitly shares in the near term, but Goldman Sachs expects only a limited short-term business impact. The stock conclusions reflect this divide. Visa remains Buy with a $438 12-month target based on 27x Q5-Q8 P/E, and Mastercard remains Buy with a $701 target based on approximately 28x Q5-Q8 EPS. Toast is Buy with a $37 target based on 22x Q5-Q8 adjusted EBITDA. Block is Buy and on the Conviction List, with a $107 target based on 18x Q5-Q8 EPS. Fidelity National Information Services is Buy with a $52 target based on approximately 8x Q5-Q8 EPS, and Remitly is Buy with a $31 target based on approximately 11x Q5-Q8 adjusted EBITDA. Goldman Sachs is more cautious elsewhere. Shift4 remains Neutral, with its target reduced to $47 from $48 using an unchanged 8x Q5-Q8 EPS excluding stock-based compensation. Its 2026/2027/2028 adjusted diluted EPS excluding stock-based compensation estimates change to $4.29/$5.84/$6.50 from $4.36/$5.82/$7.20. PayPal remains Sell with a $50 target based on an unchanged approximately 8x Q5-Q8 P/E; 2026/2027/2028 adjusted EPS estimates decline to $5.41/$6.02/$6.71 from $5.44/$6.03/$6.71. Flywire remains Neutral with a $22 target based on approximately 15x Q5-Q8 adjusted EBITDA excluding stock-based compensation. Jack Henry is Neutral with a $178 target based on 22x Q5-Q8 EPS, and Fiserv is Neutral with a $54 target based on approximately 7x Q5-Q8 EPS. Chime is Buy, and its target increases to $37 from $33 using an unchanged 22x Q5-Q8 EBITDA excluding stock-based compensation. Following higher company guidance, Goldman Sachs raises its 2026/2027/2028 EBITDA estimates to $488 million/$792 million/$1.092 billion from $471 million/$724 million/$971 million. Overall, the preferred exposures are the card networks, BNPL companies and selected consumer fintechs, while payment processors require greater selectivity because of competitive intensity, execution risks and company-specific earnings pressures.

Analysis framework

Goldman Sachs combines direct management commentary from conference meetings with current transaction, spending, credit and operating indicators. It then assesses the mechanisms through which agentic commerce, cybersecurity, competition and regulation could affect each subsector, revises company forecasts where new information changes assumptions, and applies forward valuation multiples to Q5-Q8 earnings or EBITDA estimates to set 12-month targets.

Methodology notes

• Event-Driven and Behavioral FinanceEvent-driven analysis

  Conference-based event analysis

  The report uses management discussions and investor meetings at Communacopia + Technology 2026 to identify changes in operating trends, expectations, competitive concerns and near-term catalysts.

• Valuation methodsP/E and PEG Valuation

  Forward Q5-Q8 P/E and EPS-based valuation

  For Visa, Mastercard, PayPal, Jack Henry, Fiserv, Fidelity National Information Services, Block and Shift4, Goldman Sachs applies stated forward earnings multiples to Q5-Q8 estimates; Shift4's version excludes stock-based compensation.

• Valuation methodsEV/EBITDA valuation

  Forward Q5-Q8 adjusted EBITDA valuation

  Toast, Flywire, Chime and Remitly are valued using stated multiples of Q5-Q8 adjusted EBITDA, with stock-based compensation excluded where the report specifies it.

• Competition & strategyValue chain analysis

  Agentic-commerce payment value-chain analysis

  The report examines how agentic platforms affect networks, BNPL providers, wallets, acquirers and processors, including who controls checkout, fraud management and tokenization.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Visa (V)

  Top-pick card network and potential beneficiary of agentic-commerce adoption

  Strengths

  Strong and stable spending, approximately 10% global transaction growth, accelerating cross-border volume and value-added-services opportunities

  Weaknesses

  Exposed to macroeconomic, cross-border and regulatory conditions

  Comparison

  Grouped with Mastercard as a cleaner agentic-commerce beneficiary than more competitively pressured processors

  Risks

  Weaker macro conditions, slower-than-expected cross-border recovery, competition and unfavorable regulation

• Mastercard (MA)

  Top-pick card network and potential beneficiary of agentic-commerce adoption

  Strengths

  Strong August operating metrics, resilient travel and non-travel cross-border spending, and exposure to emerging digital-payment categories

  Weaknesses

  Exposed to macroeconomic, cross-border and regulatory conditions

  Comparison

  Grouped with Visa as a preferred network exposure

  Risks

  Weaker macro conditions, slower-than-expected cross-border recovery, competition and regulation

• Affirm (AFRM)

  Highlighted BNPL top pick

  Strengths

  Secular BNPL tailwinds and supportive credit and funding markets

  Comparison

  Highlighted alongside Klarna among preferred BNPL companies

• Klarna (KLAR)

  Highlighted BNPL top pick and expanding US challenger

  Strengths

  Secular BNPL tailwinds and supportive credit and funding markets

  Weaknesses

  Faces the challenge of building a larger US franchise

  Comparison

  Highlighted alongside Affirm among preferred BNPL companies

• Shift4 Payments (FOUR)

  Neutral-rated processor with estimates modestly reduced

  Strengths

  Potential upside from better free-cash-flow conversion, stronger cross-selling and an improving macro backdrop

  Weaknesses

  Middle East travel disruption, 2027 capital-structure pressure on free cash flow and an organic-growth outlook around 10%

  Comparison

  Goldman Sachs is more selective on processors than on card networks

  Risks

  Weaker macro conditions, worse-than-expected M&A execution and greater competition

• PayPal (PYPL)

  Sell-rated processor and digital-wallet company

  Strengths

  Business diversification, cost savings and reiterated full-year transaction-margin and EPS guidance

  Weaknesses

  Third-quarter branded-checkout growth could slow to 1%-2% because of de minimis and European tariff pressure

  Comparison

  Less preferred than Toast within the processor coverage

  Risks

  Upside risks to the cautious view include improving macro conditions, better adoption of new products or services and a more favorable competitive environment

• Toast (TOST)

  Top processor pick

  Strengths

  Stable restaurant spending and potential for the IQ suite to increase SaaS revenue per user and expand the platform opportunity

  Weaknesses

  Vertical and geographic concentration

  Comparison

  Preferred processor despite broader competitive pressure in acquiring and processing

  Risks

  Weaker macro conditions, competitive pressure, lower-than-expected product adoption, and vertical or geographic concentration

• Flywire (FLYW)

  Neutral-rated payments company

  Strengths

  US enrollment data and UK performance were better than assumptions embedded in guidance

  Weaknesses

  Exposure to international-student enrollment volatility

  Risks

  Faster or slower international-student recovery, adoption of domestic payments offerings, and changes in the competitive landscape

• Jack Henry (JKHY)

  Neutral-rated bank-technology provider

  Strengths

  Accelerating momentum and record core wins

  Weaknesses

  Competition remains a downside consideration

  Comparison

  Contrasted with Fiserv's work to stabilize historical attrition and client-facing incidents

  Risks

  Bank consolidation, regulation and the macro environment can be positive or negative; competition is a downside risk

• Fiserv (FISV)

  Neutral-rated bank-technology and payments provider

  Strengths

  Reiterated guidance and a path toward more normal operating leverage in 2027 without cybersecurity spending impairing margin targets

  Weaknesses

  Third-quarter revenue is expected to decline 1%-3%, while historical attrition and client-facing incidents require stabilization

  Comparison

  Jack Henry was showing stronger momentum through record core wins

  Risks

  Macro conditions, regulation and competition can create upside or downside

• Fidelity National Information Services (FIS)

  Buy-rated bank-technology provider

  Strengths

  Reaffirmed guidance and expected Capital Markets acceleration in Q4 2026 and 2027

  Weaknesses

  M&A headwinds

  Risks

  Competitive disruption, bank consolidation and bank regulation

• Block (XYZ)

  Buy-rated Conviction List consumer-fintech top pick

  Strengths

  Resilient spending, wallet-share gains, deregulation exposure and expected profit benefits from extending Borrow duration

  Weaknesses

  Uncertainty over Borrow transition mechanics and higher transaction and loan-loss provisions

  Comparison

  Viewed as less exposed than some competitors to Nubank because of its mass-market and near-prime positioning

  Risks

  A worsening macro environment, increasing competition and unfavorable regulation

• Chime (CHYM)

  Buy-rated consumer-fintech top pick

  Strengths

  Credit-product outperformance, strong Chime Prime adoption, raised guidance and potential funding and lending efficiencies from owning a bank charter

  Weaknesses

  Synergy sources and implementation mechanics for the Stride Bank acquisition require clarification

  Comparison

  Viewed as relatively protected from Nubank's US entry by its mass-market and near-prime focus

  Risks

  Worse-than-expected net additions, loss rates improving more slowly than expected, and macro pressure on purchase volumes

• Remitly (RELY)

  Buy-rated remittance provider

  Strengths

  India's regulatory disruption lasted two months instead of the three assumed in guidance

  Weaknesses

  Nubank's free-remittance offering may create a near-term share-price overhang

  Comparison

  Goldman Sachs expects Nubank's impact to remain limited and short term

  Risks

  Heightened competition, unfavorable regulation, fraud and weaker-than-expected customer acquisition or retention

Key data

• Conference activity20 fireside chats, 2 management dinners and numerous investor meetings over 3 daysBasis for the conference takeaways
• Visa US spend growth10% last quarter; 9% quarter-to-date through AugustAugust tracking was relatively consistent with July
• Visa global payment-transaction growthApproximately 10% year over yearManagement described growth as steady
• Visa cross-border volume growth14% through August versus 12% last quarterAcceleration was driven by strong e-commerce trends
• Shift4 organic-growth frameworkHigh single digits to low double digits, around 10%Management's top-line growth algorithm
• Shift4 incremental FCF conversion60%Excludes capital-structure-related impacts
• Shift4 adjusted diluted EPS ex-SBC$4.29/$5.84/$6.50 for 2026/2027/2028Revised from $4.36/$5.82/$7.20
• PayPal Q3 branded-checkout growth1%-2%Potential range after de minimis and European tariff headwinds
• PayPal adjusted EPS$5.41/$6.02/$6.71 for 2026/2027/2028Revised from $5.44/$6.03/$6.71
• Fiserv Q3 revenue guidanceDecline of 1%-3%Management reiterated the guidance
• Flywire US visa-decline assumption-30%Internal enrollment data were trending better than this assumption
• Block Borrow durationExtended from 4 weeks to 6 weeksManagement expects the change to increase variable-profit dollars and margins over time
• Chime 2026/2027/2028 EBITDA estimates$488mn/$792mn/$1,092mnRaised from $471mn/$724mn/$971mn
• Chime target-price revision$37 from $33Based on an unchanged 22x Q5-Q8 EBITDA-SBC multiple
• Shift4 target-price revision$47 from $48Based on an unchanged 8x Q5-Q8 EPS-SBC multiple
• Remitly India disruption2 months versus 3 months assumedThe regulatory disruption was less severe than guidance had anticipated

Impact & implications

The report argues that resilient nominal spending, healthy transaction volumes and benign credit trends provide a supportive operating base for payments and fintech. Card-led agentic platforms may create incremental network, fraud and tokenization opportunities rather than near-term card displacement, favoring Visa and Mastercard. BNPL and selected consumer-fintech companies also benefit from secular adoption, supportive funding and deregulation, but processor, wallet and neobank competition makes stock selection increasingly important.

Risks

• A weaker macro environment could reduce spending, purchase volumes and transaction growth across networks, processors and consumer fintechs.
• Cross-border recovery could be slower than expected, including disruption to travel activity in the Middle East.
• Competition among wallets, processors, BNPL providers and neobanks could pressure growth, market share or margins.
• Unfavorable regulation could affect card networks, fintech lenders, remittance providers and bank-technology companies.
• Agentic-commerce adoption remains very early and its transactions still represent a very small share of payment volume.
• Cybersecurity and advanced-AI defense requirements could impose near-term investment burdens before commercial opportunities develop.
• Company-specific execution risks include Shift4's M&A integration and free-cash-flow conversion, Block's Borrow transition, and Chime's realization of Stride Bank synergies.
• Fraud, credit losses, customer acquisition and retention, product adoption, and geographic or vertical concentration remain explicit risks for selected companies.

What to watch

• Track adoption and transaction volumes for Muse, Instinct and other consumer agentic-commerce products.
• Watch whether cards remain the dominant agentic payment method and whether networks monetize fraud and tokenization services.
• Monitor BNPL participation, competition among digital wallets, and concentration of agentic acquiring among modern processors.
• Follow whether cybersecurity spending becomes a margin burden or drives bank migration to secure private-cloud and outsourced platforms.
• Watch Jack Henry's FY28 and FY29 guidance disclosures at its September 15 investor day.
• Monitor Block's six-week Borrow transition, including variable-profit benefits and loan-loss provisions.
• Assess the mechanics and funding-cost benefits of Chime's proposed Stride Bank acquisition.
• Track Nubank, Klarna and Revolut as they expand in the US fintech market.