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PayPal struggling amidst changes in preferred online casino payment methods

by ReadyBetGo Editor

PayPal (NASDAQ: PYPL) is one of the biggest and most instantly recognizable FinTech companies in the world. Founded in the late ‘90s, it has processed billions of transactions across countlessReadyBetGo EditorThere are occasions when we here at ReadyBetGo want to bring you interesting facts about the gambling industry  When something catches our eye, we will publish it for your enjoyment. 
  industries. It’s a multinational giant, a roaring success. However, according to recent reports, PayPal’s success could be waning. The way it previously impacted the gambling industry is changing throughout its fall from grace.

So, what’s happening to the brand that changed the online payment space and helped to thrust Elon Musk—part of a team that acquired the company in 2000—into the public consciousness?

The Decline

In 2021, PayPal stock hit a high of nearly $300, a jump of around 200% compared to the previous year. It came at a time when online shopping was at its height, with more people confined to their homes and glued to their devices. It was a great time for anyone holding substantial PayPal stock, but like so many companies that boomed during 2020 and 2021, it didn’t last.

By the beginning of 2022, it had already lost most of those gains and had returned to 2020 levels. But that wasn’t the end of the decline. In the two years since then, PayPal stock has taken an even bigger hit. At the time of writing, it’s worth less than $65.

The Reasons Behind PayPal’s Decline

There is rarely a single, straightforward reason for a company to decline. In PayPal’s case, however, there are two potential causes:

Rapid Growth

PayPal is still growing as a company, and it has expanded significantly in the last few years. This growth may have exposed a few cracks, ones that PayPal hasn’t been able to fill. Add increasing regulatory demands to the mix, and you have a recipe for disaster. It’s hard to scale when you do so quickly and have countless regulations across many countries to consider.

You only need to look at the company’s Trustpilot page to see how these issues have impacted users. It has an average score of just 1.3 out of 5 across over 29,000 thousand reviews. 87% of those reviews are 1 star. And it’s a similar story with the company’s listings on Reviews IO and the Better Business Bureau.

Increased Competition in the gambling sector

There was a time when you couldn’t use PayPal for activities that were illegal in the US, even if they were legal elsewhere. Online gambling is a prime example. Operators in Europe, Asia, and Australia needed secure payment methods; players wanted an alternative to debit cards and credit cards, but PayPal didn’t accommodate them. These days, there are plenty of good PayPal online casinos, but that wasn’t the case back then, and it allowed companies like Skrill (formerly Moneybookers) and Neteller to occupy a gap in the igaming market.

That casino competition likely didn’t do much to hurt PayPal’s bottom line, but there are now even more competitors and they all offer something different. Venmo and CashApp are more consumer focused while MuchBetter and Payoneer provide a similar service. You also have many apps and services that connect directly to bank accounts or allow for fast one-click payments, including Wise, Revolut, Apple Pay, and Google Pay.

And that’s before we get onto the subject of cryptocurrencies, which are free, widely available, easy to use, and available across a huge number of online casinos.

What Are They Doing About It?

PayPal recently hired a new CEO, Alex Chriss, and they’re already working on patching up the cracks and introducing features that will revive the company’s fortunes and put it back on top. These include a range of tools and features designed to support merchants, encouraging them to add PayPal to their stores while also increasing their conversions and total revenue.

It's also looking into the use of artificial intelligence (AI). One of the aces up its sleeve is that it’s been around for over a quarter of a century and has facilitated countless payments in that time. It was one of the very first FinTech companies and has grown right alongside the industry. As a result, it has a vast treasure trove of invaluable data that it can use to improve its services for individuals and businesses.

Summary: What Does the Future Look Like for PayPal?

PayPal might be struggling right now, but it is a giant of the FinTech industry and has the sort of capital and influence that other companies can only dream of. It’s unlikely that the company will disappear any time soon, and if the new CEO is able to implement positive changes, it could reach those 2021 numbers.

Whatever happens, PayPal will continue to play a big role in the world of personal and business transactions.

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