PayPal Is Holding Its Ground Amid Clash Of Digital Payment Titans

In recent years, PayPal Holdings Inc PYPL has been struggling as Big Tech titans, Apple Inc AAPL and Alphabet Inc GOOGGOOGL expanded its footprint in digital payments. Even Robinhood HOOD is entering the credit card arena. The Robinhood Gold Card pitch is impressive, to say the least, and promises to give both Apple and PayPal a headache. But at the end of April, PayPal showed it is determined to reignite the growth story of its brand offferings while its unbranded businesses continue to grow, as it confidently lifted its full year adjusted profit guidance.

First Quarter Highlights

For the quarter ended on March 31st, total payment volumes grew 14% to $403.9 billion on increased global consumer spending that held up amid an uncertain economy. Net revenue climbed 10% to $7.7 billion. Aided by cost cuts, adjusted operating margin improved to 18.2%. 

A Lifted Outlook

For 2024, PayPal guided for adjusted profit growth in in mid-to-high single-digit percentages, while it previously forecasted it will remain flat.

Focus on upgrades in attempt to win back investor support.

PayPal is trying to woo investors by making efforts to become leaner as it focuses on achieving profitable growth. CEO Alex Chriss spoke of PayPal’s work to instill cost discipline, stating that management is “leaving no stone unturned when it comes to reducing unproductive costs”. While turning things around will likely take time and it is already taking longer than some expected, PayPal feels confident in its long-term opportunities as it already evolved from a checkout button to a platform of end-to-end solutions for both merchants and consumers. It’s no exaggeration to say that the digital wallet universe is a story of the clash of the titans, with PayPal going against Apple and against Google. Apple, Google and PayPal are competing for consumers’ wallets and the battle is as intense as it gets. Apply Pay is going from strength to strength, and it is also bringing the entire Apple ecosystem for the ride, seriously challenging PayPal whose days of dominating mobile payments are long gone. But PayPal is not giving its lunch to Apple nor anyone else by showing determination not to become obsolete. After all, it made a name for itself, and with a great name, it expanded into a supersized company, that on one hand is harder to steer, but on the other, it offers the broadest assortment of services to offer solutions that can supercharge a merchant's business. With its latest quarterly report, PayPal made it clear it will do whatever it takes to reignite growth of its branded offerings.

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