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MercadoLibre MELI and Block XYZ are well-known names in the growing fintech space. Both companies have gained strong attention for their digital payment solutions. While MercadoLibre is a major player in Latin America through its Mercado Pago platform, Block is known for its Cash App and Square in the United States.
Per the Mordor Intelligence report, the fintech market size is estimated at $356.73 billion in 2025. It is expected to witness a CAGR of greater than 14% over the forecast period 2025-2030, reaching $686.89 billion by 2030. Both MELI and XYZ are well-positioned to take advantage of this strong growth in the fintech market.
Let’s take a closer look at the fundamentals of the two stocks to determine which one has the greater upside potential.
The Case for MELI Stock
MercadoLibre’s fintech arm, Mercado Pago, continues to be a major growth engine in the first quarter of 2025, delivering strong performance across multiple fronts. Monthly active users surged past 64 million, growing at a rate of more than 30% year over year. This reflects not only robust user acquisition but also increased engagement across its platform.
The company’s credit portfolio expanded 75% year over year, while maintaining healthy asset quality. In Brazil, credit card first payment defaults reached an all-time low, attributed to improved scoring models and a shift toward higher-quality borrowers. Argentina also stood out, with the credit portfolio growing fourfold in U.S. dollar terms and delivering increased profitability, supported by macroeconomic stabilization.
Mercado Pago has been integrated more tightly with the broader MercadoLibre ecosystem, undergoing a visual rebrand and UX overhaul to mirror a more specialized digital banking experience.
To further strengthen its deposit base, Mercado Pago offered an attractive 120% of Brazil’s CDI rate through targeted loyalty-linked programs. To receive this rate, users must meet specific conditions, including being part of the loyalty program, placing funds into a special pot, and adhering to a contribution limit of a few thousand Brazilian Reals. This initiative helped boost awareness and reinforced Mercado Pago’s positioning as a leading digital bank in the region.
The Case for XYZ Stock
Block’s fintech business, led by Cash App, showed strength in the first quarter of 2025 despite macroeconomic headwinds. Cash App’s gross profit rose 10% year over year, and gross profit per monthly transacting active user reached $81. The company hit a key milestone in March with FDIC approval to use its in-house bank, Square Financial Services, to issue consumer loans. This move is expected to significantly improve unit economics and expand Cash App Borrow’s reach to more users across the United States. The retroactive BNPL feature, Cash App Afterpay, launched in February, also saw strong early adoption.
Block also maintained healthy underwriting metrics for Borrow, with loan durations under 30 days and consistent repayment rates. The company emphasized confidence in the company’s ability to manage risk dynamically using machine learning models that respond to real-time data. The Cash App Borrow expansion is strategically tied to its banking offerings, especially direct deposits.
However, Cash App’s gross profit came in below internal expectations due to weaker-than-expected inflows and discretionary spending during tax season. Spending categories like travel and media saw notable pullbacks. The company attributed part of this softness to a changing macro environment and revised full-year guidance accordingly, including more caution in the outlook. Block now expects 12% gross profit growth for 2025, amounting to approximately $9.96 billion. The guidance is more conservative than usual.
Despite strategic product rollouts and credit expansion, Block is still navigating slower-than-anticipated consumer spending behaviour, which has affected growth momentum. While long-term fundamentals remain intact, near-term performance remains sensitive to macroeconomic trends and evolving consumer sentiment.