PayPal records lower than estimated revenue growth in Q4 2021
Category: #business  By Mateen Dalal  Date: 2022-02-03
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PayPal records lower than estimated revenue growth in Q4 2021

American financial technology company, PayPal Holdings Inc. plummeted after consistent decline in spending observed by the platform during fourth quarter, after a fast-paced shift of consumer interests to in-store shopping as economic recovery allowed stores to reopen.

Reportedly, the online payment platform’s transaction volume spiked by only 23%, rendering $339.5 billion in the last three months of 2021 following the successful attempts of its former parent company, EBay Inc. to avert payments offerings farther away from PayPal.

John Rainey, Chief Financial Officer at PayPal, mentioned that the platform experienced slower-than-expected end to the year with smallest surge observed after two years, as the e-Commerce growth continues to address supply chain challenges and lower income groups remain unwilling to spend.

The burgeoning growth trends observed by the online commerce sector during early pandemic period, accounting for 20% of the overall retail spending, have dramatically reversed due to disrupted supply chains hindering shipping times and growing consumer inclination towards stores.

Additionally, consumer spending is also fractured, representing a once-in-a-generation level of inflation.

Meanwhile, EBay is swiftly drifting away from PayPal, putting the latter under immense pressure in recent quarters and resulting in a much lower than estimated revenue growth.

Countering the ongoing challenges, PayPal is working towards amplifying user engagement by integrating new services into the platform, such as high-yield savings account or an option allowing users to buy or sell cryptocurrencies.

With this, PayPal has been able to hike transactions per active account to 45.4, successfully surpassing the estimated average of 42.9.

Speculations have it that, PayPal is aiming to increase active accounts to 750 million by 2025 and building upon this goal. It is spending largely on marketing campaigns with a view of enticing potential customers to experience PayPal’s many offerings.

However, the platform’s mission became a controversial subject after a review discovered 4.5 million illegitimately created accounts on PayPal.

Source Credit: https://www.bloombergquint.com/business/paypal-volume-takes-hit-after-users-return-to-in-store-shopping

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About Author

Mateen Dalal    

Mateen Dalal

Mateen has completed his Bachelor’s degree in electronics and telecommunication engineering, post which he lent his proficiency to the industry, working as a quality and test engineer. Drawn intricately toward the field of content creation however, Mateen soon switc...

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