PayPal Is 83% Below Its High. Here's What Would Send the Stock Back There.
2026-10-02 09:30
•Neil Patel •The Motley Fool
••• ••••• Axe Cap view
PayPal’s Struggle Highlights the Strength of Competitors
PayPal’s recovery hinges on reviving its branded checkout, but South African investors should watch how this impacts USD/ZAR and local fintechs.
PayPal’s shares have tanked by 83% from their peak in 2021 despite decent growth in payment volumes and free cash flow. The weak spot is its branded checkout segment, which accounts for a big chunk of profits but barely grew recently. Apple Pay, backed by hardware dominance, and credit card giants like Visa and Mastercard keep squeezing PayPal’s market share. For South Africans, this means PayPal’s struggle might slow the pace of digital payments innovation globally, but locally, the bigger impact could be on the USD/ZAR exchange. A resilient global payments ecosystem tends to support the rand through capital flows, so PayPal’s stagnation could weigh on USD/ZAR if the fintech sector looks less dynamic. I’d watch local fintech stocks closely but stick mostly with big banks like Standard Bank and Capitec, who benefit from stable payment volumes and rising credit demand. If branded checkout picks up or PayPal partners more aggressively, the story changes. this is just our opinion and not financial advice
Avoid PayPal exposure directly and focus on South African banks like Standard Bank and Capitec that provide steadier returns from local consumer credit. Watch USD/ZAR for signs of fintech-driven volatility.
- USD/ZAR
- Standard Bank
- Capitec
- Brand loyalty shift to Apple Pay and other competitors
- Global consumer discretionary spending slowdown affecting payment volumes
6/10
PayPal stock has plummeted 83% from its July 2021 peak of $305.13, despite solid fundamentals including 56% growth in payment volume and 64% growth in free cash flow over five years. The main concern is weakness in the company's branded checkout solution, which grew only 2% in recent quarters, suggesting loss of market share to competitors like Apple Pay and potential sensitivity to consumer discretionary spending. For the stock to recover, the branded checkout segment must accelerate, though the author remains skeptical of a full recovery to previous highs.
Our take is based on reporting first published by The Motley Fool.