The news: After PayPal’s “transition year” failed to take off,  CEO Enrique Lopes is charting a turnaround by diversifying its business and investing more in consumer-facing products. 

The company beat analysts’ expectations on adjusted earnings per share and transaction margin dollars but fell short on revenues. 

It also raised its guidance for Q4 and full year 2026, forecasting “slightly positive” growth for transaction margin dollars for next quarter. 

But other key metrics showed less improvement: 

• FX-neutral total payment volume (TPV) rose 7% YoY, down from 9% in Q2 and flat from a year ago.
• Total FXN revenues grew 1% YoY, down from 3% in Q2 and 6% a year ago.
• And transaction margin dollars increased 2% YoY, up 1 percentage point QoQ but down from 6% in 2025.

Why this matters: PayPal’s diversification goals mean consumers are likely to see more product rollouts, especially for Venmo and buy now, pay later (BNPL). 

Lopes confirmed that PayPal will debut BNPL-enabled cards to push installments deeper into retail commerce. It will also offer more installment products and expand BNPL in more countries.

This strategic push mirrors where PayPal has momentum: BNPL and Pay with Venmo volume grew 25% and 43%, respectively, and Venmo debit card volume is up 60% YoY.  We also forecast that Venmo will host almost half (48.5%) of all mobile P2P payments users by 2030.

However, focusing on Venmo and BNPL doesn’t resolve PayPal's broader problem. Even if Venmo becomes a successful financial super app where users turn to the platform beyond P2P, the fintech still needs to address stagnation across the rest of PayPal’s checkout business. 

Recommendations for payment providers: PayPal is trying to revive its payments business with products focused on younger consumers—a rich P2P app and payment flexibility.

To make these types of strategies more effective, payment providers need to:

• Target young adults where and how they shop. Pop-ups on college campuses and at trade schools can help providers establish financial relationships early. As these relationships mature, providers can pick up deeper volume as consumers progress in their careers.
• Make their buy buttons more visible. The majority of BNPL spending still occurs online, not in-store with cards. Partnering with merchants and retailers whose clientele have the greatest interest in payment flexibility can help providers gain share with an eager audience.

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