PayPal CEO turns to AI-driven products in bid to boost growth

Washington — PayPal is launching new artificial intelligence-driven products as well as a one-click checkout feature, the company said on Thursday as its CEO tries to inject new life into the payments giant.

It is the first major announcement under Alex Chriss, who joined PayPal in September, and the new products are another example of how companies are trying to tap investor enthusiasm for AI, which helped drive US stock markets to record highs this month.

Investors hope Chriss, who was previously a senior executive at software company Intuit, will revive PayPal’s stock, which is down more than 22% from January 2023 due to margins which have underwhelmed investors. Chriss has called 2024 a “transition year” for PayPal, and has promised to grow revenues beyond transaction-related volume.

“The data that we have and our ability to actually see what people have bought and know what merchants are trying to target, that’s where I think AI is the huge opportunity for us,” Chriss said in an interview.

PayPal shares were last down 4.6% as investors digested the news.

“The outcomes of the innovations ... are promising and should improve consumer and merchant experiences,” Andrew Harte, an analyst at BTIG, said in a research note. “That said, we do not think investors will view any of them as groundbreaking new information, but instead initiatives they would have expected the company to already be working on.”

PayPal said it will this year roll out a platform that uses AI to enable merchants to reach new customers based on their prior shopping history, using data from the roughly half-a-trillion dollars’ worth of merchant transactions it has processed globally.

Merchants will also be able to use a separate AI-based tool called “smart receipts” to recommend personalised items to shoppers in their email receipts, along with a cashback reward.

PayPal is introducing a “one-click” checkout feature called Fastlane, which in early testing has accelerated checkout speeds nearly 40%, along with new features for Venmo business profiles, the company said.

The S&P 500 index climbed to its fourth straight record high close on Wednesday, fuelled in part by a rally in technology stocks on AI optimism. PayPal reports fourth quarter earnings on February 7.

Reuters