Business
Consumers aren’t clicking the PayPal button. It’s a big problem for California’s fintech pioneer
PayPal, once the cutting-edge trailblazer of digital payments, is struggling to cash in on consumer clicks like it used to.
The San José fintech giant is losing market share to competitors and had to swap out its leadership recently as its shares plunged, and it scrambled for a faster fix.
When online shoppers reach the checkout screen, they’re not clicking on the PayPal button to buy items as much as they did in the past. People have payment options from Apple, Google and others, some of which are easier to use on their smartphones.
A slowdown in PayPal’s branded checkout is at the core of the company’s biggest challenges, analysts and company executives said.
In February, PayPal let go of its chief executive, who had been working to fix the problem, but the company said his “pace of change and execution” over two years didn’t meet the board’s expectations.
In the fourth quarter, PayPal’s online branded checkout growth slowed to 1%. The company reported an adjusted profit of $1.23 per share on revenue of $8.68 billion, missing Wall Street’s expectations.
Since January, PayPal’s stock price has fallen by more than 20%.
“The problem is that transition and push for branded checkout really has not paid off,” said Grace Broadbent, a senior analyst of payments for eMarketer.
PayPal attributed the slowdown partly to the “K-shaped economy,” in which wealthier Americans see their incomes rise while lower-income Americans struggle financially. PayPal has many middle-income customers and some lower-income customers, so a pullback in spending affects use of its payments platform.
Other factors that have hurt it recently include product execution and a hit in high-growth areas such as crypto, gaming and ticketing.
The slowdown raised questions about whether PayPal’s turnaround efforts were working. The company makes most of its money by charging fees for payment services.
“The vast majority of PayPal’s profits come from the branded checkout button,” said Mizuho analyst Dan Dolev. “The yield they get when you click on the branded checkout button is multiples of any other product that they have.”
Now the pressure is on Enrique Lores, who became PayPal’s president and chief executive in March, to get the company back on track. Lores was on PayPal’s board for nearly five years and came from computer and printer maker HP, where he served as chief executive. PayPal is investing $400 million to improve and grow branded checkout this year.
“The payments industry is changing faster than ever, driven by new technologies, evolving regulations, an increasingly competitive landscape, and the rapid acceleration of AI that is reshaping commerce daily,” Lores said in a February statement. “PayPal sits at the center of this change, and I look forward to leading the team to accelerate the delivery of new innovations.”
PayPal has seen growth in its subsidiary Venmo, a social mobile payment app, and its buy-now-pay-later services. The company is scheduled to report its first-quarter earnings in May.
“They’re going through some hard times, but I still think there’s a lot of value in PayPal,” Dolev said. “Not that many companies out there that have this kind of moat, which is a global wallet that everyone recognizes.”
Before PayPal transformed into a multibillion-dollar company with 23,800 employees and 439 million active consumer and merchant accounts across roughly 200 markets, the startup weathered a lot of change.
Founded in 1998 under a different company name by Max Levchin, Peter Thiel and Luke Nosek, the startup initially focused on security software for handheld devices before shifting to digital payments.
After merging with Elon Musk’s online bank X.com, the company was renamed PayPal. The platform made it possible for people to securely send money digitally using their email address, which was easier than writing up a check or filling out a money order.
PayPal went public in 2002 and shortly after EBay acquired the startup for $1.5 billion. In 2013, PayPal acquired the fintech company Braintree, which owned the social payment service Venmo, giving PayPal an edge in mobile commerce.
Two years later, it became an independent company when it split from EBay.
PayPal’s founders and early employees, dubbed the “PayPal Mafia” by Fortune magazine in a 2007 story, would go on to invest or build successful Silicon Valley companies.
During the COVID-19 pandemic in 2020, PayPal was flying high. People spent a lot of time stuck at home and online shopping skyrocketed. PayPal’s stock price peaked in July 2021, but has plummeted since then.
Over the last five years, its share price has dropped more than 80%.
“Now the industry is maturing, so there’s less growth to go around,” Broadbent said.
The competition is heating up, especially in the United States.
PayPal’s core users in the United States are projected to grow by fewer than 1% year-over-year to 92.1 million in 2026, eMarketer forecasts. Nationwide, Apple and Google are expected to see their digital wallet users grow more, reaching 90.5 million and 55 million U.S. users, respectively.
Apple Pay is popular among Gen Z and makes it easy to pay by double-clicking the side of their phone.
“They do so much more shopping on their phone than ever before, so Apple Pay is ingrained in their iPhone,” Broadbent said.
Google has also integrated its payment service into products such as its browser, Google Chrome. Then there are more buy-now-pay-later services that people are taking advantage of as they spread out their spending on expensive items.
Other challenges are on the horizon for payment services.
Tech companies are contending with the rise of artificial intelligence, which could disrupt the way people shop. Tech executives have talked about a future in which AI agents will shop and buy items on behalf of consumers, with their approval.
Last year, PayPal teamed up with AI company Perplexity so people could use its service to purchase products from retailers such as Abercrombie & Fitch and Ashley Furniture within Perplexity’s chat interface.
“That’s a future challenge for PayPal that opens up a lot of different dynamics of who’s gonna win,” Broadbent said.
Oil prices continued to climb on Wednesday as the disruption to Persian Gulf energy supplies persisted. The effects are being felt far beyond the region, with the average price of U.S. gasoline setting a record high since the start of the war in Iran.
The rise in energy costs is a concern for investors, but stock markets have been buoyed by solid corporate earnings, keeping indexes elevated. Traders are also looking to officials at the Federal Reserve, who announce their latest decision on interest rates on Wednesday, for guidance on the outlook for inflation, economic growth and interest rates.
Real estate developer Caruso is partnering with the electric vehicle company Rivian to add more than 150 public EV chargers to Caruso’s properties, including malls and apartment buildings.
Caruso owns several iconic Southern California destinations, such as the Grove and Palisades Village, which is scheduled to reopen this summer after last year’s wildfires. Rivian is an Irvine-based luxury EV brand that has risen in popularity in the Golden State as Tesla has lost some traction.
The multi-year partnership will add two new Rivian showrooms to the Commons at Calabasas and the Americana at Brand in Glendale. Each space will be designed like a gallery and offer private experiences, the companies said.
The DC fast chargers will be available to all EV drivers and powered entirely by renewable energy. Caruso did not specify where the new chargers would be installed. It owns residential buildings in Glendale and near Beverly Hills, as well as the Miramar Resort in Montecito.
“We are thrilled to deepen our relationship with Caruso, a partner with a shared belief in creating meaningful experiences for its community,” Marc Navarro, senior manager of real estate at Rivian, said in a statement.
The collaboration will include ride-and-drive experiences across the Caruso portfolio in Los Angeles, Marina del Rey, Thousand Oaks and other locations.
Rivian was also named a presenting partner for the 25th Annual Christmas at the Grove event. Rivian owners enrolled in Caruso’s membership program will receive free parking at all Caruso properties.
“This partnership enhances the first-class retail experience while adding meaningful convenience for our guests,” said Caruso’s chief financial and revenue officer, Jackie Levy, in a statement. “We’re creating destinations that reflect how today’s consumers live, shop and move.”
California has more than 90,000 public EV charging ports and more than 125,000 shared private ports, according to the California Energy Commission. Combined, that’s 68% more EV chargers than gasoline nozzles in the state.
Los Angeles County has nearly 4,000 public DC fast chargers, the most in the state, followed by San Diego and San Bernardino counties. As of the end of last year, 2.2 million zero-emission vehicles were registered in California, including EVs and plug-in hybrids.
There are still shortages of EV chargers in some California counties, including Modoc and Siskiyou counties in the northern-most part of the state and in Inyo County northeast of Los Angeles.
After several rounds of layoffs in 2025, Rivian signaled a comeback earlier this year with strong earnings, reporting gross profits for 2025 of $144 million compared to a net loss in 2024 of $1.2 billion.
Prime Minister Mark Carney of Canada presented a budget update on Tuesday showing that his government’s deficit would be less than projected last fall and that the country’s economy would most likely grow over the coming year despite several key industries being buffeted by President Trump’s tariffs.
The spring economic update, a mini budget of sorts, came exactly one year after Mr. Carney returned the Liberal Party to power in his first political campaign and a few weeks after special elections and defections to the Liberals by members of other parties gave him a majority and the voting control of Parliament he had been denied in that election.
But if Mr. Carney intends to use his newfound political control to change direction, there was no indication. Instead, the update underscored his broad push to reduce Canada’s economic dependence on the United States by expanding trade with other countries and cutting government spending in some areas to expand military spending and large infrastructure projects like pipelines and nuclear power reactors.
“The world has been more uncertain than ever, but despite that, the Canadian economy has been resilient,” François-Philippe Champagne, the finance minister, told reporters on Tuesday. “We’re definitely entering a new world order.”
Mr. Carney, the former central banker of Canada and England, was an investment executive until he moved into politics last year. At that time, the Conservatives seemed certain to win the election to come. Justin Trudeau, the Liberal leader at the time, had become unpopular after more than nine years in office, and his government was seen as profligate by many voters.
But Mr. Carney’s background in finance reversed the party’s fortunes when voters appeared to be searching for stability in the midst of Mr. Trump’s trade war on Canada and his calls to turn the country into the 51st U.S. state.
Since then, Mr. Carney has, publicly at least, appeared to largely operate as his own finance minister. He again upstaged Mr. Champagne this week by announcing the only major change to be found in the update. On Monday, Mr. Carney said that Canada would set up a sovereign wealth fund like those found in Norway and several oil-rich nations in the Middle East. While the fund of 26 billion Canadian dollars, about $19 billion, is considerably smaller than those other countries’ pools of money, Canadians will be able to invest their own money in Canada’s new projects.
The update clarified that the 26 billion Canadian dollars will be pulled out of the government’s general revenues over the next three years.
The only other significant measure outlined in the update was a plan to spend 2 billion Canadian dollars, or $1.5 billion, to train 80,000 to 100,000 people in skilled construction jobs, and an additional 3.4 billion Canadian dollars, or about $2.5 billion, to fund apprenticeships.
That program follows similar efforts by the federal government and provinces going back several years to deal with Canada’s chronic shortage of construction workers.
Mr. Champagne said that previous efforts had been fragmented but that the new program would be more comprehensive.
“How many people know all these programs and all these agencies?” he said.
The document also forecast that, despite declines in the jobs-heavy automotive, steel, aluminum and forestry industries brought on by American tariffs, the economy would grow by 2 percent this year. Last year, it reached 1.7 percent after falling by 0.6 percent in the final three months.
The government said that it now expected the deficit for the current fiscal year, which began this month, to be 67 billion Canadian dollars, 11 billion dollars less than it had anticipated in the November budget.
While the recent spike in oil prices is being felt by Canadian motorists, air travelers and many industries, it is benefiting Canada’s oil industry and increasing tax revenues as well as employment in that sector. Overall, the government now expects its revenues to be 9 billion Canadian dollars higher than forecast in part because fewer people are likely to lose their jobs.
In the months since November’s budget, it remains unclear exactly what jobs and programs will be lost to budget cuts. And the government has introduced a variety of new spending measures like the investment fund and a temporary removal of a federal tax on gasoline and diesel fuel to partly offset the recent price hikes.
Mr. Champagne repeatedly said that the deficit remained low relative to other industrialized nations and that the government was “fiscally prudent” and careful where it cut.
“By spending less, we can invest more in the things that really matter to Canadians,” he said.
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