PayPal Holdings, Inc.
PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. The company operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, consumer credit and debit products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
What does it do?
PayPal is the company behind the little blue button that lets you pay for things online without typing your card number into every website. When you buy something on eBay, split a dinner bill with friends on Venmo, or check out on thousands of shopping sites, there's a good chance PayPal is processing that transaction behind the scenes. They also offer buy-now-pay-later options, a digital wallet, and a debit card tied to your PayPal balance. Think of them as the plumbing that moves money between buyers and sellers across the internet.
PayPal sits at a crossroads that investors care deeply about right now: digital payments are still growing globally, but PayPal is fighting harder than ever to stay relevant as Apple Pay, Google Pay, and Shopify all want the same checkout button. The company recently brought in a new CEO, Alex Chriss, who is pushing a turnaround story focused on making PayPal more profitable rather than just bigger. At a market cap of $37 billion — down dramatically from its 2021 peak of over $300 billion — the question is whether this is a bargain or a falling knife.
How does it make money?
PayPal makes money primarily by charging a small fee every time someone sends or receives a payment — typically around 2-3% of the transaction value for merchants. With $33.2 billion in revenue in its latest year, up from $31.8 billion the prior year, the business is still growing steadily. A big chunk of that comes from Venmo, which PayPal monetizes through instant transfer fees, business payments, and its debit card. They also earn from interest and fees on their buy-now-pay-later product, Pay Later, and from currency conversion when people send money internationally.
Why do investors care?
The bull story is simple: PayPal processes over $1.5 trillion in payments annually, and with a stock price down roughly 80% from its all-time high, investors think the market has thrown the baby out with the bathwater. New CEO Alex Chriss is focused on improving profit margins — meaning keeping more of each dollar they earn — rather than chasing user growth at any cost. For this to work, PayPal needs to stop losing checkout share to Apple Pay and Google Pay, and it needs to turn Venmo into a bigger money-maker. If they pull it off, the stock looks cheap; if they can't defend their turf, the decline could continue.
Deep Dive
MemberA full investor briefing on PayPal Holdings, Inc. — history, leadership, risks, and outlook.