‘PayPal 2.0’ Aims at AI-Powered Commerce and B2B Expansion

PayPal Holding’s senior management laid out a strategy at its annual Investor Day on Tuesday (Feb. 25) that will bolster omnichannel efforts under its “unified commerce” approach,  as CEO Alex Chriss said PayPal continues its transformation from “a payments company to a commerce platform.”

The event was held the same day the company announced PayPal Open, its new merchant platform, expanded efforts with Verifone to “win checkout” and detailed a broadening of its strategic pact with J.P. Morgan Payments to expand merchant acquiring and launch Fastlane in Europe and the U.K.

“This is a new PayPal,” Chriss said. “Call it PayPal 2.0. Call it the next chapter.”

PayPal Everywhere

The announcements tie in with a strategy that Chriss said would take PayPal from being a firm that “you know and love, just online, to being available everywhere … online, instore, everywhere a consumer or a merchant wants to transact, we need to be available … creating personalized experiences, leveraging the data, leveraging the information we have [on merchants and consumers] to help them find each other.”

He said APIs and the platform, with the aid of information flows, would create customer profiles and enable merchants to “create the exact personalized shopping adventure” for those profiles, complete with product recommendations.

“We think  we can take the data, the assets that we have, and the two-sided network that we have, and create a better relationship,” he said.

Merchants also will be able to provide discounts and rewards based on that personalized relationships, according to the presentation.

During his own remarks, Chief Technology Officer Srini Venkatesan said that the data on hand spans 430 million consumers and merchants across 20 markets, along with $1.7 trillion in annual payments volumes, and 20 trillion customer interactions. But the data remains scattered across disparate systems, he added, “which slows us down.”

He told the audience that the platforms and initiatives announced Tuesday are “unifying our technology.” Artificial intelligence (AI), he said, is reducing development times for new products and services, while helping make the firm’s own employees more efficient.

Diego Scotti, general manager of the company’s consumer group, said that PayPal’s “pay everywhere” efforts will include tap to pay, credit and pay later products, and that debit has shown particular promise, as total payment volume (TPV) via debit cards has grown 100% year on year.

An NFC wallet is on track to be launched in Germany this year, he said; other P2P innovations will include the ability to send money instantly to bank accounts. And with a nod to crypto, he said, “PayPal was the company that brought the world offline-to-online and now we’re the ones taking it from online to on-chain.”

The PayPal Wallet will get “smarter,” Scotti said, as customers can add and cancel subscriptions, and “soon all of your offers, rewards and loyalty programs will stack automatically and be applied automatically right there in the app. … Consumers will automatically earn and burn merchant rewards at the point of sale.”

Focus on Merchants

Frank Keller, GM of large enterprise, said that the company has been “laser focused on reimagining our checkout experiences,” and said that Fastlane has gained momentum, with more than 170 million accounts in the U.S. that are “Fastlane ready,” where merchants will see conversion lifts of 50% in guest checkouts. The company’s overall plan is to accelerate TPV by 8% to 10% in 2027, he said, and volumes should grow at eCommerce levels.

Michelle Gill, GM of small business and financial services, said that the company has been revamping its small business efforts and “is on the path to be the indispensable platform for small business.”

She said that the 35 screens that had previously confronting merchants when onboarding had been reduced to seven. She also noted that when merchants have added buy now, pay later (BNPL), the payment option increases average order values by 62%.

“And merchants who adopt PayPal Working Capital typically see a 36% increase in their total payment volume subsequent to that first loan.”

In addition, Gill said, “In 2025, the thing we’re really excited about is we’re going to tap into a brand new market, B2B [business-to-business] bill pay. B2B bill pay is tapping into a $2 trillion market. This is exciting not just for our merchants, but also for PayPal in that it opens up a brand new network. … They now get to invite their vendors, and their suppliers to join the PayPal ecosystem. … By the end of 2025, we hope to power all of this through PYUSD,” the company’s stablecoin.