In the inaugural major announcement since Alex Chriss assumed leadership in September, PayPal is set to unveil new products, capitalizing on the current investor enthusiasm for AI that has driven U.S. stock markets to record highs.
Chriss, formerly a senior executive at Intuit, aims to revive PayPal's stock, which has experienced a more than 22% decline since January 2023 due to underwhelming margins.
Describing 2024 as a "transition year," Chriss pledges to expand revenues beyond transaction-related volume. He emphasizes the significant opportunity AI presents for PayPal, leveraging data on consumer purchases and merchant targeting. The announcement led to a 4.6% decrease in PayPal shares as investors absorbed the news.
While some analysts, like Andrew Harte from BTIG, acknowledge the promising outcomes of the innovations, they note that these initiatives may not be perceived as groundbreaking by investors, viewing them as expected efforts.
PayPal's plans for the year include the rollout of an AI-powered platform for merchants to connect with new customers based on their previous shopping history, utilizing data from approximately half a trillion dollars in global merchant transactions.
Additionally, merchants can leverage a separate AI tool, "smart receipts," embedded in email receipts to suggest personalized items and offer cashback rewards. The introduction of "Fastlane," a one-click checkout feature that has shown a 40% acceleration in early testing, and new features for Venmo business profiles are also part of PayPal's strategy.
The broader market, particularly technology stocks fueled by AI optimism, has seen the S&P 500 index reach its fourth consecutive record high close. PayPal is slated to report its fourth-quarter earnings on February 7th.