“If you think about consumer agents buying from merchant agents, both will have to validate that this is a real consumer who can pay and a real merchant that has the product,” CEO Enrique Lores said during the company’s third-quarter earnings call Tuesday (Oct. 27).
Answering an analyst’s question, Lores described collaboration with Meta and other AI companies to integrate PayPal into personal agents.
Inside PayPal, AI already handles measurable workloads, Lores said. Customer service agents supported 190 countries and six languages, resolving more than 24 million contacts year to date.
These initiatives accompany a broader restructuring. PayPal reduced headcount by more than 2,000, according to a Tuesday earnings presentation, and removed three organizational layers across most areas. It targets at least $1.5 billion in gross annualized savings over two to three years, with substantial reinvestment planned.
The consumer strategy centers on getting existing customers to use more products. Financial services include buy now, pay later (BNPL), debit and credit cards, and merchant lending. Management said these services will likely generate more than 20% of transaction margin dollars in 2026 and grow double digits.
Lores said financial services users generate higher average revenue per account, making product adoption and retention central priorities alongside monthly activity.
BNPL payment volume increased 25%. PayPal expanded distribution through merchants including Amazon in Germany and Austria, and plans cards offering installment flexibility in stores. Venmo’s debit card reached 6.7 million monthly active accounts, while its relaunched credit card rewards purchase splitting.
Digital development also includes a globally rolled-out PayPal mobile app and moving Venmo authentication onto PayPal’s identity platform.
Checkout Recovery Requires Merchant Investment
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Chief Financial and Operating Officer Jamie Miller reported continued U.S. branded checkout improvement for a third consecutive quarter. Globally, however, online branded checkout volume grew just 1% on a currency-neutral basis.
The merchant effort combines updated checkout pages, biometrics, stored payment methods, earlier BNPL messaging and joint marketing.
“We don’t apply the exact same formula to every merchant; it depends on merchant conditions, economics and interest,” Lores said during the Q&A.
He cited one unnamed U.S. omnichannel retailer where BNPL share rose from 7% to 20% after an expanded offering. Miller cautioned that merchant investments are evaluated over two to three years.
Pay with Venmo volume grew 43%, and Braintree processing volume increased 10%. PayPal is also building specialized sales teams to sell merchant services such as payouts, risk management and invoicing.
Account growth remained limited. Active accounts reached 440 million, up 0.6%, while monthly active accounts rose 0.4% to 228 million. Transaction frequency increased, as trailing annual transactions per active account reached 60.8, up 6%.
Revenue rose 2% to $8.58 billion. Total payment volume increased 6% to $487.1 billion, or 7% excluding currency movements.
On spending conditions, Miller cited continued strength in travel and services, but persistent European tariff pressures. Management maintained fourth-quarter online branded checkout growth expectations of 1% to 2% and low-single-digit currency-neutral revenue growth.
Further product, marketing and merchant investment is planned for 2027. Detailed guidance will come in February.
Shares were flat in early trading Tuesday.
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