PayPal’s 85% Crash: How the Pioneer of Digital Payments Lost Its Edge

From $308 to the Floor

PayPal’s stock peaked at $308.53 on July 23, 2021, riding a pandemic-fueled surge in online commerce that made it seem like the future of digital payments belonged to the company that had pioneered the category. Less than five years later, shares have plummeted over 85% from that high, a destruction of shareholder value that has erased more than $300 billion in market capitalization.

The latest blow came on February 3, 2026, when PayPal simultaneously reported disappointing Q4 2025 earnings and announced the exit of CEO Alex Chriss. Holiday quarter revenue of $8.68 billion missed analyst estimates of $8.80 billion. Adjusted earnings per share of $1.23 fell below the expected $1.28. And the company’s 2026 profit outlook ranged from a slight decline to a modest increase, compared to the 8% growth Wall Street had anticipated. Shares cratered 19% on the news.

Three CEOs, Three Years, No Turnaround

The leadership instability at PayPal tells a story of a company that cannot find its footing. Dan Schulman departed in September 2023 after a decade-long tenure that saw PayPal spin out from eBay and grow into a $70 billion market cap company. Alex Chriss arrived from Intuit, brought in as the outsider who would revitalize a company that had “lost its mojo.” He lasted barely 16 months.

His replacement is Enrique Lores, poached from HP where he served as CEO. CFO Jamie Miller is serving as interim CEO until Lores assumes the role. Lores brings operational efficiency expertise from running HP’s hardware and printing businesses, but he has no payments industry experience. Five analysts have downgraded PayPal since December, citing margin pressure and competitive threats.

Each CEO transition resets the strategic clock. Schulman’s vision was financial inclusion and crypto integration. Chriss pivoted to “profitable growth” and focused on branded checkout. Lores arrives with a mandate that remains undefined, inheriting a company whose core product is under siege.

Branded Checkout: The Number That Matters Most

PayPal’s most important metric is branded checkout, the transactions where consumers actively choose to click the PayPal button at checkout rather than entering their credit card directly. Branded transactions carry higher margins and represent the company’s competitive moat: they prove consumers prefer PayPal over alternatives.

That number tells a devastating story. Branded checkout growth decelerated to just 1% in Q4 2025, down from 6% a year earlier. This near-stagnation means PayPal is barely growing in the one segment that defines its value proposition. The slowdown reflects weakness in US retail, international headwinds, and tougher year-over-year comparisons, but it also signals a more fundamental problem: consumers are finding alternatives they prefer.

The company’s total payment volume reached $1.79 trillion in 2025, growing approximately 7% year-over-year. But much of that volume flows through the low-margin unbranded checkout channel (Braintree), where PayPal processes payments behind the scenes without the consumer ever seeing its brand. Growth in unbranded checkout dilutes margins and does nothing to strengthen PayPal’s consumer franchise.

Apple Pay and Stripe Are Eating the Business

The competitive landscape has shifted dramatically since PayPal’s pandemic peak. Apple Pay handled $7.6 trillion in transactions globally in 2025, growing 21% year-over-year. While that figure includes all transaction types beyond just online checkout, Apple Pay’s integration into every iPhone gives it a frictionless advantage that PayPal cannot match. One tap with Face ID versus searching for a PayPal password and navigating a redirect page: the user experience gap is widening.

Stripe has grown into PayPal’s most dangerous competitor among merchants. With an estimated total payment volume of $1.14 trillion in 2025, growing at 12.3% year-over-year compared to PayPal’s 7%, Stripe is gaining share faster. Stripe now serves 92% of the Fortune 100 and 5.3 million business customers. Its developer-first approach and superior API infrastructure have made it the default choice for new e-commerce businesses and tech companies.

PayPal still commands roughly 43-47% of the online payments market and maintains 439 million active accounts. But that dominant position is eroding steadily as competitors offer better user experiences (Apple Pay), better merchant tools (Stripe), and better value propositions for specific use cases (Block’s Cash App for P2P, Shopify Payments for e-commerce platforms).

What a Turnaround Requires

PayPal’s new leadership faces a core strategic question: can the company defend branded checkout while finding new growth vectors, or has the payments industry permanently moved past the era when a standalone checkout button was enough?

The company generated $33.2 billion in revenue in 2025 with 4% growth, a figure that would be respectable for a mature financial institution but is alarming for a technology company trading at growth-stock multiples. Full-year 2025 operating income remained strong in absolute terms, but the trajectory is clearly negative.

Lores will need to decide whether PayPal’s future lies in defending its consumer brand, pivoting to merchant services where Stripe dominates, expanding financial services (lending, savings, crypto), or accepting a slower-growth, higher-margin business model. The EV market analogy is apt: PayPal built the category, then watched as better-funded, more focused competitors nibbled away at every segment of the market it created.

Sources & Further Reading

• PayPal Shares Plunge on CEO Exit, Disappointing Forecast — CNBC
• PayPal Fires CEO, Poaches HP’s Lores — Fortune
• PayPal Stock Plunges 85% From Peak — Blockonomi
• PayPal vs. Stripe Statistics 2026 — CoinLaw
• PayPal Statistics 2026: Users, Revenue & Market Share — SpendMeNot
• Apple Pay Statistics 2026 — Capital One Shopping