The online payment problems that the leading online payments company set out to solve years ago “have actually been solved” now, says Alex Kress, CEO of PayPal Holdings Inc..
It's easy to pay with a credit card on the web, and the company faces a lot of competition in the digital wallet world, including competition from Apple Inc.
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Apple Pay, which has been gaining steam recently. Competitive concerns have recently weighed on PayPal shares
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Which is about 80% below its all-time high in July 2021.
The company is betting that it can give the company a boost by focusing more on checkout speed, marketing tools, personalization offers and artificial intelligence. It unveiled several new features centered around those concepts at its “Innovation” event on Thursday.
But while PayPal shares saw some momentum last week ahead of the event, they sold off sharply once it began. Shares rose as much as 2.1% earlier Thursday, but then headed south and were recently down 3.4%.
Among other things, PayPal has “significantly sped up the checkout process” to allow customers to checkout twice as quickly, the company said in a statement. Additionally, PayPal announced a new guest checkout feature called Fastlane that aims to let customers shop with one click even if they don't set up an account with a merchant.
This technology “will enable a significant improvement in the payment success rate,” Chris told MarketWatch, and will also allow for personalization efforts that will give merchants more information about the visitors coming to their sites.
Mizuho's Dan Dolev, who recently downgraded the stock amid competition concerns, was not sold on the exit announcement. “While the focus on using AI to enhance the checkout experience and enhance offers for consumers is positive, we believe doubling down on Branded Checkout may be a long-term regret,” he wrote.
Other customization steps include new “smart receipts” that can contain “highly relevant recommendations and rewards,” according to PayPal.
“This increases opportunities for merchants to re-engage directly with their customers, increasing the likelihood of repeat shopping and business growth,” PayPal said in its statement.
Another goal for PayPal is to better monetize its popular peer-to-peer payment platform, Venmo. People like to use the service to send money to friends, but Venmo doesn't charge a fee for this feature. PayPal has rolled out various initiatives over the years that allow it to generate revenue from Venmo, but it hasn't been able to make as much from the service as some bulls initially expected.
“We haven't done a great job of connecting consumers and businesses in a way that enables them to continually interact,” Chris said. The company is revamping business profiles on Venmo so consumers can see high-profile businesses their friends have endorsed, a “powerful” feature that will also help Venmo business users get discovered.
Furthermore, consumers may currently use Venmo to pay service professionals like hairdressers and landscapers, but Chris said the new functionality will enable these professionals to offer discounts to customers, which “opens up a huge monetization opportunity for us.”
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