PayPal, a company that helped invent online checkout in the early days of the dot-com era, is now fighting to defend the business it created. In a blunt warning to investors, new management said the core checkout operation is barely growing and that “significant changes” are necessary to get the company back on track.
The problem is a crowded field. Apple Pay has become a default option on millions of iPhones and websites, while Shopify gives merchants a direct checkout experience that bypasses PayPal entirely. Buy now, pay later firms like Affirm and Klarna have given shoppers instant financing at the point of sale, and peer-to-peer transfer services — Cash App, Zelle, and even Apple’s own wallet-to-wallet payments — have made sending money a commodity.
The financial toll is stark. PayPal’s stock rocketed during the pandemic as Americans shifted their spending online, but that surge has completely reversed. Shares have plunged about 40% in the last 12 months and are down roughly 80% from their pandemic-era highs, according to market data. The decline has erased tens of billions of dollars in market value and left investors questioning whether the company can ever reclaim the ground it lost.
The company’s predicament underscores a broader upheaval in digital payments. When PayPal was founded in 1998, the idea of sending money through a website was novel. Today, consumers expect payments to be invisible, instant, and embedded in whatever app or platform they are already using — a reality that gives an advantage to device-makers, social networks, and e-commerce platforms that control the customer’s screen. PayPal, despite its early lead, increasingly finds itself one option among many rather than the default.
The new leadership has not yet detailed its turnaround plan, but the message to shareholders is clear: the status quo is not sustainable. Whether PayPal can rediscover the agility that once made it a disruptive force remains an open question, and the next few quarters will show whether “significant changes” can translate into significant recovery.