🥶 Paradigm Shift in PayPal: Price Increase in Services and Luxury Rejection

🥶 Paradigm Shift in PayPal: Price Increase in Services and Luxury Rejection

Under new leadership, "PayPal", strategic priorities have changed: pricing policy and profitable growth are in the spotlight, especially in the unbranded part of the business.

🔣 According to the current head of PayPal Holdings, the substantial margin of innovations significantly raises the company's operational costs. Therefore, if PayPal were to raise prices for its services now, it would be entirely justified.

🔣 Under the previous administration, the main instrument of business development was expansion: precisely on this wave in 2021 PayPal bought the Japanese payment system Paydy for 2.7 billion USD and the technology platform Happy Returns, which it sold last year for 465 million USD. In terms of earnings, these investments did not particularly justify themselves.

🔣 Therefore, now instead of expansion, the focus is supposed to be on the optimization of the internal resources working under PayPal, but in the background: the volume of payments in the company's unbranded business grew by 30% last year compared to 2022 (while the volume in the PayPal brand segment only increased by 6%).

🔣 The prices of services will be increased for the target group consisting of small and medium-sized retail and industrial businesses

🔣 A large e-commerce site where payment is processed through Braintree (a system operating under PayPal), pays 5 to 10 basis points per transaction; while a smaller site will pay multiples of this amount, closer to 50-60 basis points. Larger markets are better for negotiating lower rates.

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