PayPal Holdings Inc. is confronting its toughest test in nearly three decades as the company’s flagship branded‑checkout segment posted a modest 2% gain in the first quarter, prompting investors to warn that “significant changes” will be needed to revive growth. The slowdown comes as rivals such as Apple’s Apple Pay, Shopify and buy‑now‑pay‑later firms like Klarna and Affirm have chipped away at PayPal’s roughly 9% share of U.S. e‑commerce payments, with Apple now surpassing the online‑checkout leader. After a board‑approved shake‑up that removed CEO Alex Chriss in February, former HP Inc. chief executive Enrique Lores was named interim CEO and outlined a plan to reorganize the firm into three divisions and lean more heavily on artificial‑intelligence tools.
“PayPal has had a lot of trouble evolving from being just a way to pay on your desktop computer,” said Sanjay Sakhrani, an analyst who covers credit cards and payment methods at investment bank Keefe Bruyette & Woods. The analyst noted that the company’s reliance on a desktop‑centric payment model has left it vulnerable to mobile‑first solutions like Apple Pay, which let customers store virtual credit and debit cards on their devices and complete purchases with a fingerprint or face scan.
Industry observers point to the broader shift toward integrated digital wallets and buy‑now‑pay‑later financing as key drivers of PayPal’s market‑share erosion. While PayPal now offers its own pay‑in‑four plan and longer‑term installment options, competitors such as Klarna and Affirm have long dominated the BNPL space. The company’s stock, which surged during the pandemic‑driven online‑shopping boom, has struggled to regain momentum, reflecting investor concerns over sustainable growth in a rapidly evolving payments landscape.