PayPal Shuts 4.5M Accounts: All You Need To Know

PayPal Holdings Inc PYPL closed 4.5 million accounts and lowered its forecast for new customers after finding "bad actors" were exploiting its incentives and rewards programs, Bloomberg reports. 

• PayPal no longer expects to achieve 750 million active accounts by 2025, abandoning a goal that contributed to a jump in spending last year on sales campaigns.
• PayPal admitted low-income customers were spending less due to rising prices amid the highest levels of U.S. inflation in decades. 
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• Growth in e-commerce spending also slowed as supply-chain disruptions affected shipping times and consumers did more shopping in stores during the holiday season.
• PayPal began offering its first-ever sign-up incentives in 2020, handing out as much as $10 to encourage new customers to open an account. 
• However, PayPal's risk-management team discovered that bot farms created many accounts. 
• Bot farms refer to systems fraudsters use to manipulate internet activity.
• Price Action: PYPL shares traded lower by 26% at $131.17 on the last check Wednesday.