PayPal's stock edges up 1.3% as BNPL growth outshines Klarna's struggles
PayPal's share price climbed slightly on Friday, rising 1.3% to close at $40.42. The modest gain comes after months of struggle for the payments giant, which has faced criticism over its growth strategy and market performance. Former president David Marcus recently spoke out against the company's approach to buy-now-pay-later (BNPL) services, calling it short-sighted.
PayPal's stock has endured a rocky period, hitting a five-year low of $38.88 earlier this year. Analysts have grown increasingly pessimistic, with many now doubting the company's ability to stage a strong recovery. Weak quarterly results and difficulties breaking into new markets, such as in-store retail, have added to the pressure.
Between 2023 and 2025, PayPal's BNPL offerings—including 'Pay in 4' and 'Pay Monthly'—saw a 25% jump in transaction volume, reaching over $20 billion annually. This growth helped the company strengthen its position against rival Klarna, which faced setbacks from rising default rates and tighter regulations in Europe and the US. Klarna's expansion slowed to around 10%, and its market share dipped from 18% to 15% in key regions like the US and UK.
Despite these gains, Marcus argued that PayPal has failed to capitalise fully on BNPL's potential. He claimed the service has been reduced to a basic checkout feature rather than a tool to build deeper customer relationships or capture more of the market.
The latest stock uptick offers a small reprieve for PayPal, but challenges remain. The company's BNPL growth has outpaced competitors, yet questions linger over its long-term strategy. Without clearer signs of progress in new areas, investor confidence may stay fragile.
