PayPal to launch AI-based products as new CEO aims to revive share price

PayPal to launch AI-based products as new CEO aims to revive share price

PayPal is set to unveil innovative artificial intelligence-driven products, along with a streamlined one-click checkout feature, in an effort to reinvigorate the payments giant, according to an announcement made on Thursday. This marks the first major move by CEO Alex Chriss, who joined PayPal in September. The introduction of these new products aligns with the broader trend of companies leveraging AI to capture investor interest, a factor that contributed to recent record highs in U.S. stock markets.

Investors are anticipating a revival of PayPal’s stock, which has declined by over 22% since January 2023, largely attributed to disappointing margins. Alex Chriss, previously a senior executive at Intuit, has labeled 2024 as a “transition year” for PayPal and is committed to expanding revenues beyond transaction volumes. In an interview with Reuters, Chriss highlighted the substantial opportunities presented by AI, emphasizing the value of data analytics in understanding consumer behavior and merchant targeting.

The announcement led to a 4.6% drop in PayPal shares as investors absorbed the news. Analyst Andrew Harte from BTIG acknowledged the promising outcomes of the innovations but noted that some investors might view them as expected initiatives rather than groundbreaking revelations.

One of the upcoming offerings from PayPal is an AI-powered platform enabling merchants to connect with new customers based on their previous shopping history, leveraging data from the vast array of transactions processed globally, totaling approximately half a trillion dollars. Additionally, merchants will have access to a separate AI tool named “smart receipts,” allowing them to suggest personalized items and offer cashback rewards in email receipts.

PayPal’s introduction of “Fastlane,” a one-click checkout feature, has shown promising results in early testing, accelerating checkout speeds by almost 40%. The company is also rolling out new features for Venmo business profiles.

With technology stocks experiencing a rally driven by optimism around AI, PayPal aims to capitalize on these trends. The company is scheduled to report its fourth-quarter earnings on February 7th.

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