Consumers arent clicking the PayPal button. It's a big problem for Californias fintech pioneer

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PayPal, once the cutting-edge trailblazer of digital payments, is struggling to cash in on consumer clicks like it used to.The San José fintech giant is losing market share to competitors and had to swap out its leadership recently as its shares plunged, and it scrambled for a faster fix.

When online shoppers reach the checkout screen, they’re not clicking on the PayPal button to buy items as much as they did in the past.People have payment options from Apple, Google and others, some of which are easier to use on their smartphones.A slowdown in PayPal’s branded checkout is at the core of the company’s biggest challenges, analysts and company executives said.

In February, PayPal let go of its chief executive, who had been working to fix the problem, but the company said his “pace of change and execution” over two years didn’t meet the board’s expectations.In the fourth quarter, PayPal’s online branded checkout growth slowed to 1%.The company reported an adjusted profit of $1.23 per share on revenue of $8.68 billion, missing Wall Street’s expectations.

Since January, PayPal’s stock price has fallen by more than 20%.“The problem is that transition and push for branded checkout really has not paid off,” said Grace Broadbent, a senior analyst of payments for eMarketer.PayPal attributed the slowdown partly to the “K-shaped economy,” in which wealthier Americans see their incomes rise while lower-income Americans struggle financially.

PayPal has many middle-income customers and some lower-income customers, so a pullback in spending affects use of its payments platform.Technology and the Internet PayPal is buying Honey, whose popular browser extension is used to compare prices at online shopping sites, for $4 billion.Other factors that have hurt it recently include product execution and a hit in high-growth areas such as crypto, gaming and ticketing.

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