Specialist
Former Senior Director, Global Sales, Braintree & Venmo at PayPal Holdings Inc
Agenda
- eBay's migration away from PayPal's (NASDAQ: PYPL) payment platform and PayPal's positioning against legacy and tech-forward competitors – Stripe, Adyen (AMS: ADYEN), Square (NYSE: SQ) and more
- PayPal’s SMB positioning through roll-out of Zettle POS system in the US, while increasing its e- commerce merchant fees
- Buy now, pay later offering and PayPal’s Paidy acquisition
- Braintree positioning and outlook
- Super app strategy and Venmo monetisation efforts
Questions
1.
What are your thoughts on PayPal’s loss of eBay at a faster rate than expected? Assuming eBay accounts for roughly 2.5% of TPV [total payment volume] by the end of 2021, there are estimates calculating about 2.4% as a take rate. How are you assessing PayPal’s take rate as eBay completes the shift to in-house? What are the potential challenges to that take rate?
2.
What are your high-level expectations for PayPal improving the take rate across the broader business?
3.
Can you share your thoughts on PayPal’s Zettle roll-out and how this positions the business for omnichannel SMB penetration?
4.
What’s your growth expectation for the Zettle offering? Can you elaborate on your e-commerce point and how merchant conversion to this POS offering might be challenged? How much friction could PayPal experience in that conversion effort?
5.
Can you elaborate on the pricing increase being on the e-commerce side and what you said about PayPal having the omnichannel, whereas Square lacked on the e-commerce side? Do you think the Zettle roll-out and premium pricing on the e-commerce side could diminish the value prop that PayPal is going to market with?
6.
You’ve drawn comparisons to Square and it’s interesting because the Zettle POS piece puts PayPal in a position to create a closed-loop system, similar to what Square has built. How do these closed-loop systems compare when combining Zettle with Venmo and Cash App with Square’s POS system? How might they differ and do you think PayPal has an edge on this front?
7.
How else might PayPal win with its Zettle offering, beyond the idea of having the omnichannel where PayPal possibly fits better than Square? I think the interoperability of the platform with some of the merchant’s back-office functions such as inventory and order management is interesting – obviously, we can extend out credit based from those. Why might PayPal win here with that Zettle roll-out?
8.
What do you make of some of the checkout players such as Bolt and Fast, who seem to be growing very quickly in the market? Could they have any material impact on PayPal’s checkout offering in the longer term?
9.
How are you assessing PayPal’s buy now, pay later offering amid a crowded competitive landscape? The company announced its acquisition of Japan-based Paidy in September 2021. How does its in-house buy now, pay later offering or Paidy acquisition potentially differentiate it from Affirm or Afterpay?
10.
What did you make of PayPal’s Pay in 4 offering? Prior to the Paidy acquisition, were there any gaps in the original offering on the tech side or with the go-to-market?
11.
To what extent could PayPal command stronger economics in buy now, pay later compared to some of the competitors? Bundling products together for merchants would presumably be essential to that strategy. What do you think about that respectively?
12.
How is Braintree positioned vs Stripe, Adyen, Checkout and legacy players? Stripe has made some very creative and innovative moves lately. How do you evaluate the relative positioning of some of these players across platforms and sales strategy?
13.
Why do you feel there is a lack of investment into Braintree? To what extent is Braintree falling behind here, vs peers?
14.
Do you think Braintree is more vulnerable to market pricing pressures given the lack of investment and innovation lag you mentioned? How might this pricing pressure trend in the longer term?
15.
I understand there were two different pay with Venmo integrations – there was a Braintree and then a separate PayPal integration. Now there’s a revamp to combine or go with the more optimal integration. What happened there? What optimisation was made?
16.
One of the big drivers for PayPal’s Venmo is getting greater merchant adoption and then converting many of its customers to the debit and credit offering. How are you assessing the challenges for those big drivers? What do you think about management’s ability to get 20% of the user base adopting the debit card by 2023?
17.
How might ARPU trend for Venmo in the longer term? It is around USD 12 per Venmo user, but if PayPal can execute on pay with Venmo, paying bills and the debit and credit card offerings, do you think ARPU could significantly grow beyond USD 12? Secondly, do you think USD 1bn in 2021 revenue is possible for Venmo?
18.
What are your expectations for PayPal’s super app? How might that take shape and how successful do you think it will be, broadly?
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