Author: Hazel , Zhi Wubuyan

This giant, which once rewrote global payments and created a generation of entrepreneurial mafia, has lost its glory. And just as it plummeted to the bottom, hunters already smelled blood.

Around 2006, a group of small foreign trade business owners in Guangdong and Fujian began to explore opening stores on eBay. They sat in small offices next to their factories, doing business with strangers on the other side of the world using broken English.

The hardest part isn't language or logistics, but money—how do you get an American buyer to safely transfer money to a Chinese seller?

What made this possible was a blue button. That button is called PayPal.

At that time, PayPal represented the forefront of financial democratization and the most advanced productivity. Following the "Website Payments Standard Integration Guide," small and medium-sized businesses around the world only needed to enter a piece of HTML code and paste it into their webpage to receive payments globally.

This technological equality, coupled with the foundation laid by eBay as the only officially recommended payment method, made PayPal the undisputed global payment giant. Even today, you'll find PayPal on any overseas checkout page.

Twenty years have passed. Many of those small foreign trade business owners from back then have grown from small eBay shops into successful cross-border merchants with independent websites, Amazon stores, TikTok, and Temu. China's cross-border e-commerce exports have exceeded 2 trillion RMB, and payment tools have evolved from a single blue button to a diverse array of platforms like Stripe, Wise, Lianlian, and Mileslink.

The industry has grown up, but PayPal has become somewhat outdated.

Three weeks ago, on February 3, PayPal released its financial report, causing its stock price to plummet by 20% in a single day, and its CEO to resign in disgrace. Brand checkout, its main source of profit, saw its active user growth rate drop from its once high-speed trajectory to 1%, and transaction volume from active accounts declined by 5% over the past 12 months.

Whether it's Stripe's one-click link payment, Apple Pay with biometric verification, or even just filling in bank card information via Google, all seem more convenient than that slightly outdated blue icon interface where you might not even remember your login password.

It was once a legend created by people like Musk, Peter Thiel, and Hoffman. Pelosi once held a large stake, and Woody Allen was once its most loyal supporter, but they both chose to sell off their entire holdings.

PayPal's market capitalization plummeted from a peak of $363 billion during the pandemic to a recent low of $38 billion—a 90% drop in five years, with its P/E ratio hitting a low of 7.4. Only after Bloomberg exclusively reported today that at least one major competitor is evaluating a full acquisition, and several other parties have expressed interest in certain assets, did the stock price rise by nearly 10%.

This news itself is the most accurate illustration of PayPal's predicament. When a company starts to be seen as prey rather than predator, yet its market value rises as a result, it shows that the market's confidence in its independent operation has fallen short of expectations of it being bought out.

The once-mighty payment empire, like the aging British Empire, still flies its flags around the world, the sun still high in the sky, but the awe that once filled its eyes is gone. Everyone knows in their hearts that times have changed. But how exactly did it fall into decline?

"It's truly painful to see a company I love so much come to this."

On February 3, David Marcus, former president of PayPal, published a lengthy article on X, offering a rare and scathing critique of the company he had dedicated his life to.

David Marcus's career has been intertwined with radical financial innovation. He currently serves as CEO of LightSpark, a Bitcoin Lightning Network payment company. During his time at PayPal, he recruited top engineering talent and spearheaded the acquisitions of Braintree and Venmo; at Facebook, he was one of the leaders of the groundbreaking stablecoin project Libra. Although Libra failed due to regulatory issues, today's stablecoin boom is a testament to David's foresight and boldness.

Besides the stock price crash, another reason that prompted David to post this long message was that former CEO Alex Chriss resigned after less than three years in office and was succeeded by former HP CEO Enrique Lores.

Enrique Lores served as CEO of HP for seven years, introducing the print-as-a-service monetization model and initiating a massive layoff plan. He is undoubtedly a master of cost reduction, efficiency improvement, and business restructuring. If the PayPal board already had the idea of selling PayPal, either as a whole or in parts, this choice would be even more logical.

David subtly expressed his dissatisfaction: "I don't know Enrique. He might be a great leader, but at least on paper, he's a hardware executive who's been parachuted into a payments company."

This echoes David's core criticism. Unlike the market's decision to vote with its feet due to poor financial performance, David believes PayPal's Achilles' heel lies in the fact that "the company's leadership style has completely shifted from 'product-driven' to 'finance-driven.' Over time, the belief in the product has given way to financial optimization."

To paraphrase a famous quote by Benjamin Franklin: Any company that sacrifices its product for short-term stock price gains will eventually fall behind product trends and lose its stock price.

David believes PayPal has lost its "mojo." This was the spirit of PayPal's mafia-era days—the wild power that dared to tear down office roofs to solve an impossible problem. But today, that power has been replaced by compliance reviews and financial optimization.

Stripe, which conquers developers with its concise API, has this mojo. Open Stripe, and the constantly flashing "Global GDP running on Stripe" in the upper left corner exudes a conqueror's aura.

Apple Pay, which has been heavily promoting Passkey in recent years, has this Mojo. Relying on its underlying security chip and Face ID, it delivers an extremely comfortable payment experience—raise your wrist, scan your face, and complete the transaction without even opening the app. This is something PayPal, which still relies on a three-step process of redirecting to a page, reauthorizing, and waiting for confirmation, cannot achieve.

Neobank's representative, Revolut, has this mojo. With its formidable execution capabilities, this emerging company has rapidly built a full-stack financial platform covering stocks, currency exchange, and cryptocurrencies in dozens of countries, and continues to expand its reach.

These three companies have one thing in common: their mojo doesn't come from scale, user numbers, or even money. It comes from a product belief: that what they are doing will make a difference in some corner of the world.

And this is just the tip of the iceberg. Shop Pay, Klarna, Affirm, afterpay, Wise, Cash App, Adyen—every single entry point in the payment industry is packed with players.

What is secure checkout? | Checkout Page

PayPal once had something like that. That piece of HTML code, that button that enabled an American man selling secondhand goods in his garage and a small Chinese factory owner in Guangzhou doing foreign trade to complete cross-border payments, was itself a declaration of changing the world. But the process of losing it was quiet, almost silent.

When discussing PayPal's development over the past few years, one cannot ignore Venmo.

Venmo did one thing right: it turned money transfers into a social activity—split the bill for meals, split rent, and send it to friends with an emoji—making it much more fun than bank transfers. Its spread among young Americans is more like a social media app than a payment tool. "Venmo me" has even become a verb, a synonym for money transfers among young Americans.

PayPal's acquisition of Venmo was actually a byproduct of its acquisition of payment service provider Braintree. This product, which was not so prominent at the time, is now a bright spot in PayPal's otherwise lackluster financial reports: $1.7 billion in revenue in 2025, over 100 million monthly active accounts, 50% year-on-year growth in Pay with Venmo transaction volume, and 40% growth in debit card users.

PayPal's Q4 Earnings: Venmo Debit Card Drives Growth | Michael Wang posted on the topic | LinkedIn

But behind these figures, several deep-seated issues are brewing: those who are optimistic about it are obsessed with the doubling of debit card transaction volume, believing that this cash cow is entering a period of monetization and harvest; while those who are worried about it will ask in return, if this prosperity is just relying on draining the remaining social circles to their limits, how long can this afterglow last?

This disconnect essentially stems from Venmo being caught in a squeeze of different niches: upwards, it can't break through the solid walls erected by Apple Pay and Google Pay; downwards, it can't penetrate the deep-seated networks of Stripe and Adyen. Venmo's growth is strong, but its ceiling is also quite obvious.

First, there's the internal friction of the growth model. Behind the 20% revenue growth is only 7% active user growth—Venmo is no longer expanding its territory, but instead is taxing its own people, squeezing the same group of users even more, but failing to attract a new generation.

Secondly, there is the dual dilemma of geography and product essence. Venmo has always been locked into the United States, capturing American tables but still far from reaching the global cash register.

Finally, the vision of full-scenario financial services has temporarily fallen through. In the business loop PayPal designed for Venmo, there was a shopping plugin called Honey, which was originally intended to connect the "discovery-payment" link. However, in 2024, Honey nearly collapsed due to a scandal involving the manipulation of affiliate links, and this traffic pipeline was cut off, thus hindering Venmo's transformation.

How can a standalone consumer payment app prove itself worthy of users actively opening it? Venmo is working on answering this question, but the answer has not yet been revealed.

Venmo reflects PayPal's anxieties on the consumer side. Further ahead, PayPal is betting on two other cards—PYUSD and Agent payments. What these two cards have in common is that the market is large enough, but the odds of success are still uncertain.

Objectively speaking, PYUSD has not performed poorly. Since its launch in 2023, its market size has reached $4 billion, consistently ranking among the top ten stablecoins in terms of market capitalization. However, compared to Tether's approximately $180 billion USDT and Circle's approximately $70 billion USDC, PYUSD's size is only a fraction.

This actually proves one thing: even if everyone can issue stablecoins, the barriers to channel distribution and user mindshare remain very high, and even a behemoth like PayPal cannot expect to achieve a breakthrough.

When PayPal announced a 4% annual interest rate for PYUSD holders in April 2025, the industry was initially alarmed, with some exclaiming that the giant was about to kill the game. However, things develop gradually. The current trillion-dollar usage of stablecoins mainly comes from crypto trading hedging and market making, cross-border arbitrage and gray market fund transfers, and as the underlying asset for DeFi lending, LPs, and yield farming—are not PYUSD's strengths.

In the future, stablecoins will undoubtedly be used in more and more transparent and everyday scenarios, such as cross-border B2B payments, on-chain settlements, and daily retail. However, the competition will also be extremely fierce. Not to mention the two giants USDT and USDC, the innovation-driven USDe and USD1, backed by the Trump family, are also formidable rivals. PYUSD does not have a very good chance of winning.

Beyond stablecoins, PayPal has also set its sights on aggregator payments. They abandoned error-prone web scraping and instead integrated with merchant order management systems via API. Merchants simply need to sign an agreement, and PayPal can distribute their real-time data, including inventory, colors, and prices, to major AI platforms like Google Gemini, as well as PayPal's own app.

The idea is clear, but this is a market yet to be tested. Recently, Qianwen gave away red envelopes and treated everyone to milk tea, which can be regarded as a market education for domestic consumers on AI shopping. However, changing consumer habits is not something that can be done overnight. Whether chatting with AI to shop will become the mainstream, or whether the main shopping experience is still about a person slowly picking and comparing prices, remains to be seen.

Even if people do get used to saying to ChatGPT, "Buy me a cup of iced, 30% sweet oolong tea," the transaction data will still be controlled by AI platforms with massive user bases. These AI platforms will likely also have their own proprietary payment methods, or distribute them across the board. In this new chain, PayPal's position remains questionable.

After discussing so much loss and uncertainty, you might think that PayPal's story has come to an end.

But the reality is never one-sided. Braintree remains the underlying payment engine for many global platforms. Pay Later processed over $40 billion in transactions by 2025, holding a leading market share in the US BNPL market. Fastlane, launched in August 2024, is a rare proactive move, directly challenging Apple Pay and Shop Pay. Add to that 400 million active accounts and over $6 billion in free cash flow annually—these assets are strategic entry tickets that are difficult to replicate from scratch for any company seeking a foothold in the AI agent economy.

Nearly thirty years of accumulation have not been in vain, nor will they vanish into thin air. It's just a pity that the mighty river has swept them all away.

The person who best understands how to use this coupon may no longer be PayPal itself.

PayPal的稳定币PYUSD市值突破10亿美元

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