PayPal (NASDAQ:PYPL) President and CEO Enrique Lores said the company is restructuring its operations, increasing its emphasis on consumers and pursuing growth beyond its traditional branded checkout business as it seeks to create shareholder value.
Speaking at a company event, Lores said PayPal’s global scale, customer loyalty and ability to process transactions across multiple countries remain important assets. However, he said the company had been operating with a complex model spanning products, customers, regions and functions, which impeded execution.
Strategy Focuses on Diversification and Consumers
Lores outlined a shift away from relying primarily on branded checkout as the company’s profit source. PayPal is instead seeking to broaden its financial-services offerings while expanding Venmo and Braintree, he said.
The company plans to focus on safety and trust, payment flexibility and greater transaction value for high-value customers. Buy now, pay later, or BNPL, is central to that strategy, according to Lores, who said BNPL transactions tend to have larger ticket sizes and greater customer purchasing frequency than traditional transactions.
PayPal is working to more fully integrate BNPL into its checkout offering rather than treating it as a separate business. The company also plans to expand its BNPL availability geographically and add options to the portfolio over time.
In Germany, one of PayPal’s largest markets, Lores said the company is emphasizing consumer engagement, high-value customers and BNPL growth. PayPal recently announced an Amazon partnership in the country and plans to introduce a loyalty product in Germany.
European Tariffs Pressure Checkout Growth
While Lores said overall spending trends have remained generally consistent with previous quarters and expectations, he identified a greater-than-expected impact from tariffs in Europe. The effect has been concentrated among customers conducting cross-border business, particularly from China.
PayPal originally expected tariffs to reduce total payment volume growth by between half a percentage point and one percentage point. The impact has been larger and is lasting longer than expected, Lores said.
As a result, PayPal expects branded checkout growth of 1% to 2% for the current quarter. Nevertheless, Lores said the company remains confident in its guidance for earnings per share and transaction-margin growth for both the quarter and the full year, citing its efforts to diversify the business.
Venmo, Braintree and Cost Savings
Lores said Venmo has delivered seven consecutive quarters of double-digit total payment volume growth. Revenue surpassed $1.7 billion in 2025 and grew about 20%, according to the discussion.
PayPal aims to make Venmo more relevant to consumers’ financial lives through payments, credit and debit-card offerings. Lores said the Venmo debit-card connect rate remains relatively low despite growing more than 70% in the second quarter, leaving room for further expansion. Broader merchant adoption of Pay with Venmo is another near-term growth opportunity, he said.
Within the company’s payment service provider and Braintree operations, Lores said core processing has continued to grow at a double-digit rate. PayPal is building a specialized sales force to increase adoption of value-added services, including payouts and risk services. He said the company expects to see tangible progress from these efforts toward the end of the year and particularly through 2027.
PayPal has identified at least $1.5 billion in gross run-rate cost savings over two to three years. Lores said the savings will come from three primary areas:
- Simplifying the organizational structure by reducing layers and expanding spans of control;
- Simplifying the product portfolio and go-to-market activities; and
- Using automation and artificial intelligence more aggressively.
The company intends to reinvest savings in financial services, BNPL, marketing and infrastructure for high-value consumers, as well as a technology modernization effort. Lores said PayPal expects to build a new technology stack over the next two years and integrate platforms that resulted from prior acquisitions.
New Operating Structure and Capital Priorities
PayPal has split its operations internally into three businesses: Checkout; Processing and Venmo; and Consumer Financial Services. Lores said the change is intended to improve accountability and accelerate decision-making, with business leaders responsible for their respective profit-and-loss statements.
The company expects to begin segment reporting next year, allowing investors to assess the performance of the individual businesses, he said.
On capital allocation, Lores said PayPal expects to maintain its current approach in the near term, including at least $6 billion in adjusted free cash flow, roughly $6 billion in buybacks and its quarterly dividend. Over time, the company plans to evaluate mergers and acquisitions tied directly to its growth strategy, with an emphasis on strategic fit, integration planning and financial returns.
Lores said PayPal’s goal remains to deliver sustained double-digit earnings-per-share growth supported by transaction-margin growth. He added that management is confident in the company’s opportunity to create value, while acknowledging that additional progress is still needed across several areas.
About PayPal (NASDAQ:PYPL)
PayPal Holdings, Inc is a digital payments and financial technology company that operates a global platform for consumers and businesses. Its services enable customers to send and receive money, make purchases online and in stores, and accept payments through digital checkout solutions. PayPal supports transactions using linked bank accounts, debit and credit cards, stored balances and other payment methods.
The company’s consumer and merchant offerings include the PayPal wallet, PayPal Checkout, PayPal Zettle point-of-sale tools, PayPal Braintree payment processing and PayPal Complete Payments.
