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PayPal is one of the world’s largest online payment companies. Millions of people
and businesses use it every day to send and receive money. In early 2026, PayPal
surprised investors by announcing that its future profits may be lower than
expected. At the same time, the company named Enrique Lores, former CEO of HP,
as its new leader.
After this news, PayPal’s stock price dropped sharply. Many investors became
worried about the company’s future. This article explains what happened, why it
matters, and what it means for PayPal users and investors.
PayPal’s Weak Profit Forecast for 2026
On February 3, 2026, PayPal shared its financial outlook for the coming year. The
company said that its profit in 2026 may grow very slowly or even fall slightly. This
was much lower than what experts on Wall Street expected.
Most analysts believed PayPal would grow by about 8 percent. Instead, the
company said growth would be much smaller. This disappointed investors and
raised questions about PayPal’s business strategy.
During the last quarter of 2025, PayPal also reported weaker results than expected.
Revenue reached 8.68 billion dollars, which was below predictions. Profit per share
was also lower than forecasts.
These numbers showed that PayPal is facing serious challenges in today’s digital
payments market.
Strong Market Reaction and Falling Stock Price
After PayPal released its earnings report and leadership news, its share price
dropped by nearly 16 percent in early trading. This was one of the company’s
biggest one-day drops in recent years.
Investors reacted negatively because they were worried about slow growth, weak
profits, and strong competition. Many people feared that PayPal may be losing its
position as a market leader.
The stock drop also reduced the company’s total market value by billions of
dollars. This showed how important investor confidence is for big technology and
fintech companies.
Enrique Lores Takes Over as CEO
One of the biggest announcements was the appointment of Enrique Lores as
PayPal’s new President and CEO. He will officially start on March 1, 2026.
Before joining PayPal, Lores was the CEO of HP Inc. for more than six years. At HP,
he led major changes, improved efficiency, and focused on digital innovation. He
also invested in artificial intelligence and new business models.
Lores is not new to PayPal. He has been a member of the company’s board for
several years and served as chairman. This means he already understands PayPal’s
internal structure and challenges.
Until Lores takes full control, Chief Financial Officer Jamie Miller will serve as
interim CEO to ensure stability.
Why Alex Chriss Left the Company
Alex Chriss became CEO during a difficult time after the COVID-19 pandemic. Online
shopping growth slowed, and competition increased.
During his leadership, Chriss worked on improving Venmo, expanding Buy Now Pay
Later services, and cutting costs. He also tried to modernize PayPal’s technology.
However, the company’s board felt that progress was too slow. They wanted faster
results and stronger execution. As a result, they decided to bring in a more
experienced transformation leader.
Chriss agreed that it was the right time for change and supported the transition.
Economic Pressure and Lower Consumer Spending
One major reason for PayPal’s weak performance is the global economic situation.
Many consumers are struggling with high living costs, high interest rates, and
uncertain job markets. Because of this, people are spending less on travel,
entertainment, and luxury items.
Instead, they are focusing on basic needs like food, rent, and utilities. This change
directly affects online payments and digital transactions.
When people spend less online, payment companies like PayPal earn less in fees
and commissions.
Weak Holiday Season Performance
The last quarter of the year is usually the best time for payment companies. People
buy gifts, travel, and shop online during the holidays.
However, in late 2025, PayPal did not see the strong growth it expected. Online sales
were weaker than usual, and international transactions slowed down.
Currency changes and global economic uncertainty also hurt performance. This
weak holiday season raised concerns about PayPal’s ability to benefit from peak
shopping periods.
Problems with Branded Checkout Growth
PayPal’s branded checkout is one of its most important products. It allows users to
pay quickly on websites using their PayPal account.
This service usually brings high profits. But in 2025, growth in branded checkout
slowed sharply.
In the last quarter, growth was only 1 percent, compared to 6 percent the year
before. This slowdown happened because of weak retail sales, global economic
pressure, and stronger competition.
Since branded checkout is very profitable, its slow growth is a serious problem for
PayPal.
Rising Competition in Digital Payments
PayPal is no longer the only major player in online payments. Today, many strong
competitors are fighting for market share.
Big technology companies like Apple and Google offer their own payment systems.
These services are built into smartphones and operating systems, making them
easy to use.
At the same time, fintech companies like Stripe, Square, and Klarna are growing fast.
They offer modern tools, lower fees, and better user experiences.
Because of this, PayPal must work harder to keep its customers and merchants.
PayPal’s Plan to Improve Performance
Despite current problems, PayPal believes it can recover and grow again.
The company is focusing on improving its main products, especially branded
checkout. It wants to make payments faster, easier, and safer.
PayPal is also working on cutting unnecessary costs and improving efficiency. This
will help increase profit margins.
Another important goal is investing in artificial intelligence. AI can help with fraud
prevention, customer support, and personalized services.
PayPal also plans to strengthen partnerships with banks, online stores, and
developers. These partnerships can help expand its ecosystem.
Finally, the company wants to grow in emerging markets where digital payments
are still developing.
The Role of Artificial Intelligence
Artificial intelligence is becoming very important in financial technology.
PayPal plans to use AI to detect fraud faster, reduce risks, and protect users’
accounts. It can also improve customer service through chatbots and automation.
AI can analyze user behavior to offer better payment options and rewards. For
merchants, it can help predict sales and optimize pricing.
Under Enrique Lores, AI is expected to become a central part of PayPal’s strategy.
What This Means for Investors
Investors are now watching PayPal very closely. They want to see clear signs of
improvement in 2026.
They will focus on revenue growth, profit margins, customer numbers, and product
performance. They will also judge how well the new CEO leads the company.
If PayPal succeeds in its transformation, its stock price may recover. If not,
investors may lose more confidence.
Impact on Users and Businesses
For regular users, changes at PayPal may bring better security, faster payments,
and new features.
Merchants may benefit from improved tools, better analytics, and stronger
protection against fraud.
However, during the transition period, some services may change or be updated.
Long-Term Outlook for PayPal
PayPal still has strong advantages. It has hundreds of millions of users, a global
brand, and a trusted payment system.
It also has valuable data, strong partnerships, and advanced technology.
If the company adapts to new trends like mobile payments, AI, and embedded
finance, it can remain a leader in digital payments.
But success will depend on strong leadership and fast execution.
PayPal’s lower profit forecast for 2026 and the appointment of Enrique Lores as
CEO mark an important moment in the company’s history.
The company faces economic pressure, rising competition, and changing consumer
behavior. These challenges have slowed growth and hurt investor confidence.
However, PayPal still has strong resources and a clear strategy for recovery. With
new leadership, a focus on innovation, and better execution, it has a chance to
rebuild trust and return to growth.
The next few years will decide whether PayPal can regain its leadership position in
the global digital payments industry.
