PayPal Lost 7 Million Active Users in Nine Months of 2023, the Biggest Drop in its History

November 27, 4:43 am

One of the first and most significant players in the digital payments landscape and the fifth most accepted payment option after all the major credit cards, PayPal, has had a solid year so far. The nine-month revenue of the online payments service has grown by $1.6bn year-over-year, and the total payment volume is up by 12% YoY. But PayPal's user count has dropped.

According to data presented by AltIndex.com, PayPal has lost seven million active users in the nine months of the year, showing the biggest decrease in the platform's history.

User Count Drops for Three Quarters in a Row

For the past 25 years, PayPal has given companies and consumers an alternative way to manage international payments. However, it seems the platform's popularity started fading this year. Despite the company grossing $1.5bn more than in the nine months of 2022, its user count dropped.

According to Statista and the official company data, at the end of 2019, PayPal had around 305 million active users. But after COVID-19, which triggered a surge in digital payments in general, PayPal's user count jumped by 40% and hit 426 million. The positive trend continued throughout 2022, with the service reaching its all-time high of 435 million users in Q4 2022. But things changed this year, with more and more people deactivating their PayPal accounts.

Statistics show PayPal lost two million active users in the first quarter of the year, with their total number falling to 432 million. The negative trend continued between April and June, with another two million people deactivating their accounts. In the third quarter of the year, PayPal lost three million users, pushing the total nine-month drop to seven million. What's even more worrying, this is the biggest user drop PayPal has ever seen.

User Count Drops, but Payments Volume Grows

Despite losing seven million users, PayPal's total payment volume jumped by 12% year-over-year, showing those who kept their accounts continued using the service more than before. Statistics show the platform's nine-month payment volume hit $1.1trn, up from $999bn reported in the same period a year ago. In Q3, the company's payment volume jumped by 15% YoY and hit an all-time high of $387.7bn, while net revenue increased 8% year-over-year to $7.4bn.

These better-than-expected results, combined with a slight increase in projected FY earnings per share, caused PayPal's stock price to rise. However, its stock value is still far below where it was a year ago. In November last year, PayPal's market cap amounted to $91.1bn, and now it’s $60.1bn.

According to the AltIndex platform, PayPal stocks have an AI score of 49 out of 100 and are designated with a hold signal. Also, according to data from the top investing forums, the overall sentiment for investing in PayPal is positive. The company had a sentiment score of 72 out of 100 in November, meaning it had more positive discussions in stock forums than most other companies in this industry.

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