Despite reporting better-than-expected first-quarter profit and sales, the fintech giant PayPal still counts much less users than it did a year ago.
According to data presented by Stocklytics.com, PayPal had 427 million active users in Q1 2024, or six million less than in the same period last year.
Four straight quarters of a user drop followed by a slight rebound in Q1
For years, PayPal has seen its user base grow, fuelled by the surging number of companies and consumers searching for an alternative way to manage international payments.
Statista and official company data show that the number of PayPal active users almost quadrupled between 2010 and 2020, jumping from 84 million to 325 million. Although the COVID-19-caused surge in online payments had a huge impact on this increase, PayPal’s user base continued growing even after 2020.
By the end of 2022, the payment provider counted 435 million users, the highest number in its history. However, things changed last year, with more and more people deactivating their PayPal accounts. Statistics show PayPal lost four million active users in the first half of 2023, and the negative trend continued throughout the year.
The following six months brought another four million users down, pushing the total loss to eight million. Although PayPal’s active user base rebounded in Q1 2024, adding one million users, the total year-over-year user drop remains at seven million.
Interestingly, despite losing seven million users, PayPal’s total payment volume jumped by almost 14% year-over-year, showing those who kept their accounts continued using the service more than before. In Q1, the company’s payment volume hit $403.8 billion, up from $354.5 billion reported in the first three months of 2023.
The only payment giant with a negative five-year stock return
The declining user base and fears that Google and Apple’s entry into digital payments could take away a big chunk of PayPal’s business have significantly impacted the company’s stock, which has been struggling throughout the last year. Although PayPal`s stock price bounced back this year, rising by roughly 5% year-to-date, its five-year return is still in the red.
Assuming an investor had bought $10,000 worth of PayPal stocks five years ago, they would now face a loss of over 43% on their investment. But even more worrying is that PayPal is the only payment giant with a negative five-year stock return.
In comparison, Visa’s stocks were traded at $275 last week, or 67% more than five years ago. Mastercard and American Express brought even better five-year returns to investors. Since 2019, Mastercard stock price has jumped by 75%, rising from $263 to $450 as of last week. The five-year return of the American Express hit over 95% last week, with its stock price reaching close to $225 last week.
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