The company reported its fourth-quarter and full-year 2025 earnings results Tuesday (Feb. 3) alongside a shakeup at the top. The board named Enrique Lores, most recently PayPal’s board chair, as president and CEO effective March 1, tasking him with accelerating execution and imposing sharper discipline on strategic priorities. Chief Financial and Operating Officer Jamie Miller will serve as interim CEO during the transition.
Miller opened the earnings call Tuesday morning by saying that the company realizes its “execution has not been what it needs to be.”
“We have not moved fast enough or with the level of focus required, and we are taking immediate steps to address that reality,” she said.
Branded Checkout Slows, Other Engines Rev
PayPal delivered what Miller called a “solid” performance across parts of the portfolio, but branded checkout emerged as a key area of discussion. Online branded checkout total payment volume grew just 1% on a currency-neutral basis in the fourth quarter, down from 5% in the third, a four-point deceleration.
Miller traced the slowdown to several forces, including retail weakness in the United States, international headwinds led by Germany (among the company’s largest international markets), and cooling in previously fast-growing verticals such as travel, ticketing, cryptocurrency and gaming.
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“We saw pressure across our retail merchant portfolio, particularly among lower- and middle-income consumers,” she said of the U.S. operations, adding that the environment has reflected a “K-shaped economy.”
PayPal rolled out redesigned checkout experiences more slowly than planned, according to management commentary on the call, and merchant integrations required more hands-on support than anticipated.
“We were too optimistic about how quickly we could drive change and customer adoption across a massive global user base,” Miller told analysts.
Those headwinds were not lost on investors. Shares were down 18% in early trading Tuesday as markets absorbed the branded checkout deceleration and the more cautious outlook for 2026.
Biometrics, Passkeys and Upstream Placement
Management outlined a three-part set of priorities for branded checkout, including experience, presentment and selection.
On experience, PayPal is leaning harder into passkeys and biometric authentication, pairing them directly with redesigned checkout flows rather than deploying them sequentially. About 36% of consumers are now “checkout ready,” Miller said, meaning they have biometric authentication in the app or via device passkeys, up 15 percentage points from a year earlier.
The goal is to move closer to half of users into that category by 2026, she said, citing testing that shows two to five points of conversion improvement with large merchants when biometrics are active.
Presentment has become equally critical. When PayPal is positioned upstream on product pages and paired with buy now, pay later (BNPL) messaging or co-marketing, selection rates more than double versus lower placement, Miller said. Early data shows that upstream BNPL presentation can lift branded checkout volume by more than 10%, although those placements currently reach less than 15% of traffic.
Selection rounds out the triad, with loyalty and incentives designed to pull consumers back repeatedly. PayPal+, launching in the U.S. and Europe this year, aims to reward behavior across online and offline purchases, peer-to-peer activity and crypto. Early cohorts in the United Kingdom posted mid-single-digit branded checkout growth, achieved largely without marketing, Miller said.
Refocusing on High-Impact Merchants
Rather than trying to modernize checkout across its entire merchant base simultaneously, PayPal is concentrating resources on merchants that already represent about 25% of branded checkout volume, billed as “high impact” and “strategic” merchants on the call. Dedicated teams are now responsible for deploying experience upgrades, biometric enrollment and upstream placement as a package, Miller said.
“This is one area where Enrique will really help,” she said, pointing to his background in large-scale operational transformations and disciplined execution.
Bright Spots: Venmo, PSP and Agentic Commerce
Even as branded checkout decelerated, other businesses supplied ballast.
Venmo revenue reached about $1.7 billion in 2025, up roughly 20% year over year, with fourth-quarter TPV rising 13% and monthly active accounts climbing to 67 million. Debit card usage and “Pay with Venmo” both posted double-digit growth, underscoring a shift toward everyday spending.
“We continue to drive deeper, more active relationships with our customers,” Chief Investor Relations Officer Steve Winoker said on the call, adding that monthly active accounts increased 1% to 231 million.
“Transactions per active account, excluding PSP, which is a good proxy for engagement, maintained momentum with 5% growth,” he said.
“While debit card and tap-to-pay spend represent a small portion of branded experiences volume today, they continue to grow rapidly, up 60% year over year,” he added.
PayPal’s PSP and enterprise payments unit also regained momentum, delivering seven consecutive quarters of profitable growth and a return to double-digit volume expansion in the fourth quarter, Miller said. Value-added services and margin improvements helped offset branded checkout headwinds.
Management also said during the call that when BNPL offerings are presented upstream and with a second payment button, the company sees more than a 10% lift in branded checkout volumes.
Looking further ahead, PayPal is positioning itself for agentic commerce, enabling artificial intelligence agents to discover products and complete transactions through integrations with chat platforms and tools such as Microsoft Copilot. Miller cautioned that agentic initiatives will not materially move 2026 results, but she said the ambition is to become the default payment option as AI-driven shopping scales.
For 2026, management guided to slightly positive to low-single-digit branded checkout growth, with targeted investments creating roughly three points of headwind to transaction margin dollars as PayPal funds experience upgrades, presentment and loyalty. The company also stepped back from its prior multiyear outlook, opting instead for annual guidance while it works through the reset.
