The push to capture a share of in-person shopping at stores, cafes and restaurants is part of an ambitious turnaround strategy by new chief executive Alex Chriss, who joined the company from Intuit last year.
While PayPal has long dominated online payments and peer-to-peer payments through its Venmo app, it hasn’t pushed consumers to use its products in person.
“E-commerce has obviously been one of the fastest growing areas where people spend their money… but that’s not all,” Chriss said. “Now consumers can use PayPal for every purchase, anywhere, anytime.”
The point-of-sale initiative includes 5% cash back on select products, up to $1,000 per month, and additional rewards from brands like DoorDash and Sephora.
The value of debit card payments in the United States has increased in recent years, reaching $4.55 trillion in 2021, up from $2.47 trillion in 2015, according to recent data from the U.S. Federal Reserve.
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Chriss said consumers are becoming more cost-conscious and opting for debit cards, which allow them to meet their spending limits. PayPal will also allow customers to use debit cards with Apple Pay, as users take advantage of mobile wallets and “tap to pay” options.
That makes it one of the most competitive debit card cash-back products, with just 24% of debit cardholders reporting they have earned cash-back rewards in 2023, compared with 74% of credit cardholders, a report from shopping rewards company Valuedynamx showed.
While PayPal has long enjoyed a first-mover advantage, rising competition from Apple and Google has taken away some share of the mobile payments market, analysts say.
As part of the effort, the company is making its largest-ever marketing investment to promote in-person PayPal use. PayPal declined to disclose the amount of the investment, but warned in its quarterly results that marketing and branding campaigns would drive up spending in the second half of the year.
Chriss has called 2024 a “transitional year” for PayPal and has promised to grow revenue beyond transaction-related volume. In January, PayPal launched AI-powered products and a one-click checkout feature.
PayPal’s share price is up more than 17% since the beginning of the year, but still lags behind the benchmark S&P 500 index’s 22% gain.
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