PayPal shares fall 5% as eBay moves on from payments firm

PayPal still expects revenue for the year to climb roughly 18.5% when adjusting for fluctuations in currencies

PayPal shares slumped 5% in the latest New York trading session after warning earlier this week that eBay is moving payments off its platform faster than the technology giant originally anticipated.

That’s hindering revenue, which climbed just 17% to $6.2bn (€5.2bn), missing the average of analysts’ estimates and below the forecast the company set just three months ago. PayPal said it expects revenue in the third quarter of as much as $6.25bn.

PayPal has been battling the loss of eBay, it’s former parent company, ever since the two decided to end their longtime partnership in 2018.

“We’ve always known that eBay is going to move their managed payments away from PayPal, it’s a matter of timing,” chief executive Dan Schulman said in an interview. “That’s happening faster than we anticipated,” he said. 

The shares fell 5% but they have gained 22% this year, outpacing the 18% advance of the S&P 500 Information Technology Index.

Despite eBay’s move away from PayPal, the payments giant said it still expects revenue for the year to climb roughly 18.5% when adjusting for fluctuations in currencies. 

It also reaffirmed guidance that it would add as many as 55 million active users this year.

The company’s total payments volume soared 40% to $311bn in the second quarter, topping analysts’ estimates and exceeding $300 billion for the first time ever in a three-month period. 

Volume is now expected to rise as much as 35% this year, up from the roughly 30% PayPal previously expected. 

Bloomberg