In his
Even as PayPal remains mired in a global e-commerce sales trough, the company this year aims to modernize its checkout technology by driving toward passwordless, one-click native in-app experiences as well as deploying the next generation of checkout using data and artificial intelligence, Schulman told analysts on Thursday when announcing the firm's fourth-quarter results.
To help support these initiatives, Schulman said PayPal will further pare costs — beyond the
"When you look at mobile checkout, it's clear that somebody like Apple has some inherent advantages in authentication and exclusive use of the NFC chip," Schulman said, alluding to intensified competition with other online checkout options, potentially including the
As e-commerce sales decelerated in recent months, PayPal managed to increase its overall share in digital wallets as consumers making purchases using PayPal's branded checkout and its digital app chipped away at the estimated 30% of online transactions via manual card number entry, according to Schulman.
"We have accelerated meaningfully in terms of our branded share of checkouts coming out of December and into January and February," he said, noting that PayPal's sales in the first several weeks of the year have picked up.
Against a broader backdrop of economic uncertainty, PayPal avoided making any full-year GAAP forecasts. The company did disclose its full-year estimate for non GAAP earnings to grow by 18% to $4.87.
"Our baseline assumption is that discretionary spend will remain under pressure, and global e-commerce growth will be slightly positive year-over-year," Schulman said, noting that buy now/pay later loans continue to accelerate.
Any merchants joining PayPal's platform in the second half of 2023 will have PayPal's buy now/pay later option automatically built into the checkout flow, Schulman said. He noted that PayPal has issued more than 200 million buy now/pay later loans to nearly 30 million customers, and approximately 300,000 merchants offer PayPal's BNPL loans on their product pages.
PayPal has also completed the integration of Pay with Venmo, making it available to all U.S. Amazon customers, Schulman said.
Schulman, 65, plans to retire at the end of the year, while he will continue to serve on the company's board.
"Of course, I'm going to be flexible in my time frame. If [a successor is found] sooner, great. If it takes longer, I've told the board that I'm willing to stay on slightly longer as well, just to be sure we get the right person," Schulman said.
PayPal's total payment volume for the quarter ended Dec. 31 rose 9%, to $357 billion, from the same period a year earlier. Net revenue for the quarter was $7.4 billion, up 7% over a year earlier. Operating income for the fourth quarter was $1.2 billion, up 18% over 2022.
Analysts gave PayPal's fourth-quarter results a mixed score. Transaction volume and net new active accounts both fell below market expectations, while adjusted operating margin came in higher, Jefferies analysts said in a Thursday note to investors.
For the full year, total payment volume grew 13%, to $1.36 trillion, from the prior year. Net revenue for 2022 rose 8% to $27.5 billion and operating income declined 10%, to $3.8 billion.
PayPal added 8.6 million net new active accounts in 2022, ending the year with 435 million accounts.
