What changed in this filing

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Item 1. Business

2024-02-08 compared with 2023-02-10 · 101 added, 105 removed, 195 unchanged (51% of the section changed)

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Our goal is to enable our merchants and consumers to manage and move their money anywhere in the world in the markets we serve, anytime, on any platform, and using any device when sending payments or getting paid, including person-to-person (“P2P”) payments.

Our core values of Inclusion, Innovation, Collaboration, and Wellness, reflected in our leadership principles, are the driving forces behind our mission and form the foundation of our operating philosophy.

We believe that our core values help stimulate the creativity and engagement of our global workforce to deliver products and services designed to meet the diverse needs of our customers.

We also believe that effective management of environmental, social, and governance (“ESG”) risks and opportunities is essential to deliver on our mission and strategy.

We believe that effective management of non-financial risks and opportunities, including environmental, social, and governance (“ESG”) topics, helps to create value for our stakeholders and deliver on our mission and strategy.

We also believe that our core values help stimulate the creativity and engagement of our global workforce to deliver products and services designed to meet the diverse needs of our customers.

Unless otherwise expressly stated or the context otherwise requires, references to “we,” “our,” “us,” “the Company,” or “PayPal” refer to PayPal Holdings, Inc.

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We provide proprietary payment solutions accepted by merchants that enable the completion of payments on our platform on behalf of our customers.

We operate a global, two-sided network at scale that connects merchants and consumers with 435 million active accounts (consisting of 400 million consumer active accounts and 35 million merchant active accounts) across more than 200 markets as of December 31, 2022.

We offer our customers the flexibility to use their PayPal or Venmo accounts to purchase and receive payments for goods and services, as well as the ability to transfer and withdraw funds.

We operate a global, two-sided network at scale that connects merchants and consumers with 426 million active accounts (consisting of 391 million consumer active accounts and 35 million merchant active accounts) across approximately 200 markets as of December 31, 2023.

We offer our customers the flexibility to use their PayPal or Venmo accounts to send and receive payments for goods and services, as well as the ability to transfer and withdraw funds.

We enable consumers to exchange funds more safely with merchants using a variety of funding sources, which may include a bank account, a PayPal or Venmo account balance, PayPal and Venmo branded credit products including our installment products, a credit card, a debit card, certain cryptocurrencies, or other stored value products such as gift cards, and eligible rewards.

Our PayPal, Venmo, and Xoom products also make it safer and simpler for friends and family to transfer funds to each other.

Our PayPal and Venmo products also make it safer and simpler for friends and family to transfer funds to each other.

We offer merchants an end-to-end payments solution that provides authorization and settlement capabilities, as well as instant access to funds and payouts.

We also help merchants connect with their customers, process exchanges and returns, and manage risk.

We help reduce the friction typically involved in cross-border commerce by offering consumers a simple payment experience and by enabling merchants to extend their reach to consumers in the global markets in which our services are available.

We help merchants connect with their customers, and offer tools and insights to help increase sales, power omnichannel experiences, and manage risk.

We also help reduce the friction typically involved in cross-border commerce by offering consumers a simple payment experience and by enabling merchants to extend their reach to consumers in the global markets in which our services are available.

We earn revenues primarily by charging fees for completing payment transactions for our customers and other payment-related services, which are typically based on the volume of activity processed on our payments platform.

We also generate revenue from customers on fees charged for foreign currency conversion, for instant transfers from their PayPal or Venmo account to their bank account or debit card, and to facilitate the purchase and sale of cryptocurrencies;

We also generate revenue from customers for currency conversion, for instant transfers from their PayPal or Venmo account to their bank account or debit card, and to facilitate the purchase and sale of cryptocurrencies;

however, we generally do not charge customers to fund or draw from their accounts.

We also earn revenue by providing other value added services, which are comprised primarily of revenue earned through partnerships, interest and fees from our merchant and consumer credit products, interest earned on certain assets underlying customer balances, referral fees, subscription fees, and gateway services.

We also earn revenue by providing other value-added services, which primarily comprise revenue earned through partnerships, interest and fees from our merchant and consumer credit products, interest earned on certain assets underlying customer balances, referral fees, subscription fees, and gateway services.

KEY PERFORMANCE METRICS

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We believe that our competitive strengths include the following:

• Two-sided network — our payments platform connecting merchants and consumers enables PayPal to offer unique end-to-end product experiences while gaining valuable insights into how our customers use our platform.

• Two-sided network — our payments platform connecting merchants and consumers enables PayPal to offer unique end-to-end product experiences designed to remove friction for consumers and drive sales conversion for merchants while gaining valuable insights into how our customers use our platform.

Our payments platform provides for digital and in-store (at the point of sale) transactions while being both technology and platform agnostic.

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• Scale — our global scale helps us to drive organic growth.

As of December 31, 2022, we had 435 million active accounts, consisting of 400 million consumer active accounts and 35 million merchant active accounts in more than 200 markets around the world.

As of December 31, 2023, we had 426 million active accounts, consisting of 391 million consumer active accounts and 35 million merchant active accounts in approximately 200 markets around the world.

A market is a geographic area or political jurisdiction, such as a country, territory, or protectorate, in which we offer some or all of our products and services.

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In 2023, we processed $1.53 trillion of TPV.

• Trusted brands — we have built and strengthened well-recognized and trusted brands, including PayPal, Braintree, Venmo, Xoom, Hyperwallet, PayPal Zettle, PayPal Honey, and Paidy.

• Trusted brands — we have built and strengthened well-recognized and trusted brands, including PayPal, Braintree, and Venmo.

Our communications and marketing efforts across multiple geographies and demographic groups play an important role in building brand visibility, usage, and overall preference among customers.

• Risk and compliance management — our enterprise risk and compliance management program is designed to help secure customer information and to help ensure we process legitimate transactions around the world, while identifying and minimizing illegal, high-risk, or fraudulent transactions.

• Risk and compliance management — our enterprise risk and compliance management program is designed to help keep customer information secure and ensure we process legitimate transactions around the world, while identifying and minimizing illegal, high-risk, or fraudulent transactions.

• Regulatory licenses — we believe that our regulatory licenses, which enable us to operate in markets around the world, are a distinct advantage and help support business growth.

MERCHANT AND CONSUMER PAYMENT SOLUTIONS

During 2022, we reorganized our product organization to better align with merchants and consumers to help simplify decision making and enable our teams to innovate and launch new products and features more quickly and efficiently.

In late 2023, we reorganized our operations to be more closely aligned to the customers we serve—consumers, small businesses, and large enterprises—and to help enable our teams to deliver more seamless and differentiated end-to-end experiences.

Merchant value proposition

We partner with our merchants to help grow and expand their businesses by providing global reach and powering all aspects of digital checkout.

We offer alternative payment methods (including access to credit solutions), provide fraud prevention and risk management solutions, reduce merchant losses through proprietary protection programs, and offer tools and insights for utilizing data analytics to attract and engage customers and improve sales conversion.

We employ a technology and platform agnostic approach intended to enable merchants of all sizes to quickly and easily provide digital checkout online, including through PayPal-branded checkout and unbranded card processing (primarily consisting of Braintree), as well as in-store at the point of sale, across all platforms and devices, and to securely and simply receive payments from their customers.

PayPal’s payments platform enables merchants to accept all types of online and offline payments, including those made with the PayPal and Venmo digital wallets, our consumer credit products, credit cards and debit cards, and competing digital wallets, as well as other popular local payment methods.

We offer alternative payment methods including access to credit solutions, provide fraud prevention and risk management solutions, reduce merchant losses through proprietary protection programs, and offer tools and insights for utilizing data analytics to help merchants attract and engage customers and improve sales conversion.

We employ a technology and platform agnostic approach intended to enable merchants of all sizes to quickly and easily provide digital checkout online, including through PayPal-branded checkout and unbranded card processing (primarily consisting of Braintree), as well as in person at the point of sale, across all platforms and devices, and to securely and simply receive payments from their customers.

PayPal’s payments platform enables merchants to accept all types of online and in person payments, including those made with the PayPal and Venmo digital wallets, our consumer credit products, credit cards and debit cards, and competing digital wallets, as well as other popular local payment methods.

Our diversified suite of products and services is tailored to meet the needs of merchants regardless of their size or business complexity.

We have expanded our merchant value proposition to enable payment acceptance at the point of sale through our PayPal and Venmo digital wallets and our PayPal Zettle point of sale solutions.

We aim to offer a seamless, omni-channel solution that helps merchants manage and grow their business.

Through our consumer-focused offerings, we provide simplified and personalized shopping experiences for consumers, including easier exchanges and returns, to help merchants drive increased conversion through higher consumer engagement.

We offer access to merchant finance products for certain small and medium-sized businesses through the PayPal Working Capital and PayPal Business Loan products, which we collectively refer to as our merchant finance offerings.

The PayPal Working Capital product allows businesses to access a loan or cash advance for a fixed fee and based on their annual payment volume processed by PayPal.

The PayPal Business Loan product provides businesses with short-term financing for a fixed fee based on an evaluation of both the applying business as well as the business owner.

We offer a seamless, omnichannel solution that helps merchants manage and grow their business.

By offering simplified and personalized shopping experiences for consumers, we help merchants drive increased engagement and sales conversion.

We offer access to merchant financing products for eligible small and medium-sized businesses through the PayPal Working Capital and PayPal Business Loan products, which we collectively refer to as our merchant financing solutions.

The PayPal Working Capital product allows businesses to access a loan or cash advance for a fixed fee, based on their annual payment volume processed by PayPal.

The PayPal Business Loan product provides businesses with access to short-term financing for a fixed fee or interest based on an evaluation of both the applying business as well as the business owner.

In the United States (“U.S.”), these products are provided under a program agreement with an independent chartered financial institution.

We believe that our merchant finance offerings enable us to deepen our engagement with our existing small and medium-sized merchants and expand services to new merchants by providing access to capital that may not be available from traditional banks or other lending providers.

We believe that our merchant financing solutions enable us to deepen our engagement with our existing small and medium-sized merchants and expand services to new merchants by providing access to capital that may not be available from traditional banks or other lenders.

We generate revenues from merchants primarily by charging fees for completing their payment transactions and other payment-related services.

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Consumer value proposition

We focus on providing affordable, convenient, and secure consumer financial products and services intended to democratize the management and movement of money.

We focus on providing affordable, convenient, and secure consumer financial products and services intended to facilitate the management and movement of money.

We provide consumers with a digital wallet that enables them to send payments to merchants more safely using a variety of funding sources, which may include a bank account, a PayPal or Venmo account balance, our consumer credit products, a credit card, a debit card, certain cryptocurrencies, or other stored value products such as gift cards, and eligible rewards.

Our goal is to create the simplest checkout experience possible for consumers both online and on mobile devices.

We also offer consumers P2P payment solutions through our PayPal, Venmo, and Xoom products and services.

We enable both domestic and international P2P transfers across our payments platform.

We also offer consumers P2P payment solutions for domestic and international transfers through our PayPal, Venmo, and Xoom products and services.

Our Venmo digital wallet in the U.S.

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P2P is an important source of customer engagement and also serves as a customer acquisition channel that facilitates organic growth by enabling potential users to establish active accounts with PayPal or Venmo at the time they make or receive a P2P payment.

We also focus on simplifying and personalizing shopping experiences for our consumers by offering tools for product discovery, price tracking, offers, convenient tracking and redemption options for their shopping rewards, and easier exchanges and returns, which help our merchants to increase consumer engagement and sales conversion.

We offer credit products to consumers in certain markets as a funding source at checkout, subject to approval of credit for the account holder.

Our consumer credit offerings include our buy now, pay later products in the U.S., United Kingdom (“U.K.”), France, and Germany, among others, and in Japan through Paidy.

We also focus on simplifying and personalizing shopping experiences for our consumers by offering tools for product discovery, price tracking, saving through deals and offers, convenient package tracking, and redemption of shopping rewards, which help our merchants to increase consumer engagement and sales conversion.

We offer credit products to eligible consumers in certain markets as a funding source at checkout.

Our consumer credit offerings include our buy now, pay later products in the U.S., United Kingdom (“U.K.”), France, and Germany, among other markets, and in Japan through our Paidy brand.

A key attribute of our buy now, pay later products is the absence of interest or consumer late fees for missed payments in most of the geographies where we offer them.

Further, we offer consumer interest-bearing installment products for consumers in the U.S., issued by an independent chartered financial institution, and in Germany.

Further, we offer interest-bearing installment products for consumers in the U.S.

(issued by an independent chartered financial institution) and in Germany.

In the U.S., consumers may apply for our PayPal- and Venmo-branded consumer credit cards and our PayPal Credit revolving consumer credit product, which are offered through a partnership with an independent chartered financial institution.

We offer a PayPal-issued PayPal Credit product in the U.K.

We believe that our consumer credit products help enable us to increase engagement with consumers and merchants on our two-sided network.

We have expanded our consumer value proposition through enhancements to the PayPal and Venmo digital wallets, which provide functionality to enable consumers to more easily checkout, explore deals and offers, track and redeem rewards, and to transact with cryptocurrencies, including buying, holding, selling, sending, and receiving them in certain markets.

Our goal is to drive increased consumer engagement by providing consumers with a comprehensive set of services to manage their finances and enhance their ability to shop online and in person.

We generate revenue from consumers on:

fees charged for foreign currency conversion, instant transfers from their PayPal or Venmo account to their bank account or debit card, and to facilitate the purchase and sale of cryptocurrencies;

We believe that our consumer credit products help us to increase engagement with consumers and merchants on our two-sided network.

We have expanded our consumer value proposition through enhancements to the PayPal and Venmo digital wallets, which provide functionality to enable consumers to more easily check out, explore deals and offers, track and redeem rewards, and to transact with certain cryptocurrencies, including buying, holding, selling, sending, and receiving them in certain markets.

Our goal is to drive increased consumer engagement by providing consumers with a wide range of services to manage their finances and enhance their ability to shop online and in person.

We generate revenue from consumers from:

foreign currency conversions, instant transfers from their PayPal or Venmo account to their bank account or debit card, and facilitating the purchase and sale of cryptocurrencies;

interest, fees, or other revenue from our credit products;

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PROTECTING MERCHANTS AND CONSUMERS

Protecting merchants and consumers on our payments platform from financial and fraud loss is important to successfully competing and sustainably growing our business.

Protecting merchants and consumers on our payments platform from financial and fraud loss is important to successfully compete and sustainably grow our business.

Fraudulent activities, such as account takeover, identity theft (including stolen financial information), and malicious activities by counterparties, represent a significant risk to merchants and consumers, as well as their payment partners.

We provide merchants and consumers with protection programs for certain purchase transactions completed on our payments platform.

We believe that these programs, which help protect both merchants and consumers from financial loss resulting from fraud and counterparty non-performance, are generally consistent with or broader than protections provided by other participants in the payments industry.

Our protection programs are designed to promote confidence on both the part of consumers, who will only be required to pay in certain circumstances, such as receiving their purchased item in the condition significantly as described, and merchants, who will receive payment for delivering an item to the customer.

In addition to the protections afforded by applicable law, we provide merchants and consumers with protection programs for certain purchase transactions completed on our payments platform.

Our protection programs help protect both merchants and consumers from financial loss resulting from, among other things, counterparty non-performance.

These programs are designed to promote confidence on the part of both consumers, who will not be required to pay in certain circumstances, such as not receiving their purchased item in the condition significantly as described, and merchants, who will receive payment for delivering an item to the customer.

We believe that these programs are generally consistent with or broader than protections provided by other participants in the payments industry.

Our ability to help protect both merchants and consumers is based largely on our proprietary, end-to-end payments platform and our ability to utilize the data from both sides of transactions on our two-sided network, specifically from buyers and sellers and from senders and receivers of payments.

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Many of the areas in which we compete evolve rapidly with innovative and disruptive technologies, shifting user preferences and needs, price sensitivity of merchants and consumers, and frequent introductions of new products and services.

Competition also may intensify as new competitors emerge, businesses enter into business combinations and partnerships, and established companies in other segments expand to become competitive with various aspects of our business.

We compete with a wide range of businesses.

Some of our current and potential competitors are or may be larger than we are, have larger customer bases, greater brand recognition, longer operating histories, a dominant or more secure position, broader geographic scope, volume, scale, resources, and market share than we do, or offer products and services that we do not offer.

Other competitors are or may be smaller or younger companies that may be more agile in responding to regulatory and technological changes and customer preferences.

We differentiate ourselves to merchants through our ability to innovate and develop products and services that offer new payment experiences for our merchants, demonstrate that they may achieve incremental sales by using and offering our services to consumers, support transactions on our payments platform across varied technologies and payment methods, through the simplicity and transparency of our fee structure, our seller protection programs, analytics, and risk management, as well as other merchant services.

In addition, we differentiate ourselves to consumers through the ability to use our products and services across multiple commerce channels, including e-commerce, mobile, and payments at the point of sale, and without sharing their financial information with the merchant or any other party they are paying;

Competition also may intensify as new competitors emerge, businesses combine or enter into new partnerships, and established companies in other segments expand to become competitive with various aspects of our business.

Our business faces competition from a wide range of businesses and from all forms of physical and electronic payments.

We face competition from banks and financial institutions, which provide traditional payment methods (particularly credit cards and debit cards (collectively, “payment cards”), electronic bank transfers, credit, and installment methods), payment networks that facilitate payments for payment cards or proprietary retail networks, payment card processors, and “card on file” services.

We also face competition from providers offering a variety of payment products and services, including tokenized and contactless payment cards, digital wallets and mobile payments solutions, credit, installment or other buy now pay later methods, real-time payment systems, P2P payments and money remittance services, card readers and other devices or technologies for payment at point of sale (such as contactless cards, tokenized cards, Near Field Communication (NFC) based solutions, and Quick Response (QR) code based solutions), virtual currencies (such as cryptocurrencies and stablecoins) and distributed ledger technologies, and tools that simplify and personalize shopping experiences for consumers and merchants.

Our products and services also face competition from paper-based payments (primarily cash and checks).

through the simplicity and transparency of our fee structure;

and through our seller protection programs, analytics, and risk management, as well as other merchant services.

In addition, we differentiate ourselves to consumers through our broad acceptance and the ability to use our products and services across multiple commerce channels, including e-commerce, mobile, and in person payments, and without sharing their financial information with the merchant or any other party they are paying;

our customer service, dispute resolution, and purchase protection programs;

and our ability to simplify and personalize shopping experiences.

We invest resources towards improving our products and services, offering choice in payment options, providing excellent customer service, and building brands that merchants and consumers trust.

Our business faces competition from a wide range of businesses and from all forms of physical and electronic payments.

We face competition from banks and financial institutions, which provide traditional payment methods (particularly credit cards and debit cards (collectively, “payment cards”), electronic bank transfers, and credit), payment networks that facilitate payments for payment cards or proprietary retail networks, payment card processors, and “card on file” services.

We also face competition from providers offering a variety of payment products and services, including tokenized and contactless payment cards, digital wallets and mobile payments solutions, credit, installment or other buy now pay later methods, real-time payment systems, P2P payments and money remittance services, card readers and other devices or technologies for payment at point of sale, virtual currencies and distributed ledger technologies, and tools that simplify and personalize shopping experiences for consumers and merchants.

Our products and services face competition from all forms of payments, which include paper-based payments (primarily cash and checks), credit cards, debit cards, electronic bank transfers, account-to-account payments, credit, installment methods, digital wallets and mobile payment solutions, contactless payments (including contactless cards, tokenized cards, Near Field Communication (NFC) based solutions, and Quick Response (QR) code-based solutions), and virtual currencies, such as cryptocurrencies and stablecoins.

We invest resources towards improving our products and services and expanding their acceptance, offering choice in payment options, providing excellent customer service, and building brands that merchants and consumers trust.

In addition to the discussion in this section, see “Item 1A.

Risk Factors” under the caption “ We face substantial and increasingly intense competition worldwide in the global payments industry” for further discussion of the potential impact of competition on our business.

Our ability to grow revenue is affected by, among other things, the macroeconomic environment and its impact on consumer spending patterns, merchant and consumer adoption of digital payment methods, the expansion of multiple commerce channels, the growth of mobile devices and merchant and consumer applications on those devices, the growth of consumers globally with internet and mobile access, the pace of transition from cash and checks to digital forms of payment, our share of the digital payments market, and our ability to innovate and introduce new products, services, and features that merchants and consumers value.

Our ability to grow revenue is affected by, among other things, the macroeconomic environment and its impact on consumer spending patterns, adoption of digital payment methods, the expansion of multiple commerce channels, the growth of mobile devices and merchant and consumer applications on those devices, the growth of merchants and consumers globally with internet and mobile access, the pace of transition from cash and checks to digital forms of payment, our share of digital payments, and our ability to innovate and introduce new products, services, and features that merchants and consumers value.

Our strategy to drive growth in our business includes the following:

• Growing our core business :

through expanding our global capabilities, customer base and scale, increasing our customers’ engagement and use of our products and services by better addressing their everyday needs to access, manage, and move money, creating seamless checkout experiences, and expanding the adoption of our solutions by merchants and consumers;

through expanding our global capabilities, customer base and scale, increasing our customers’ engagement with our products and services by better addressing their everyday needs to access, manage, and move money, creating seamless checkout experiences, and expanding the adoption of our solutions by merchants and consumers;

• Expanding our value proposition for merchants and consumers :

by being technology and platform agnostic, partnering with our merchants to grow and expand their business online and in-store, and providing consumers with simple, secure, and flexible ways to manage and move money across different markets, merchants, and platforms, and simplifying their shopping experiences;

by being technology- and platform- agnostic, partnering with our merchants to grow and expand their business online and in person, including offering merchants risk management and seller protection programs, and providing consumers with simple, secure, and flexible ways to manage and move money across different markets, merchants, and platforms, including offering buyer protection programs and simplifying their shopping experiences;

• Forming and expanding strategic partnerships :

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• Seeking new areas of growth :

organically and through acquisitions and strategic investments in our existing and new international markets and focusing on innovation in both the digital and physical world.

ESG MANAGEMENT

PayPal is committed to creating a more inclusive global economy and advancing our core values of Inclusion, Innovation, Collaboration, and Wellness across our communities, workforce, and strategies.

We manage priority ESG risks and opportunities organized across four key pillars:

(1) employees and culture, (2) social innovation, (3) environmental sustainability, and (4) responsible business practices.

We believe this integrated, enterprise-wide approach to managing our global business responsibly helps to enable us to create value for all our stakeholders, including our stockholders, employees, partners, and communities.

We continue to advance and prioritize efforts to manage key non-financial factors critical to our long-term business, including progress on our science-based approach to reducing our climate change impacts, targeted investments and partnerships to address the racial wealth gap and empower underserved communities and businesses, ongoing programmatic development intended to foster an inclusive culture across the employee experience, and further enhancements to support the safety and security of our products and platform.

We take this commitment seriously and endeavor to provide transparent disclosures on our progress through our annual Global Impact Report and other communications.

by focusing on innovation in both the digital and physical worlds and finding opportunities to expand and improve upon our existing products and capabilities.

Our payments platform utilizes a combination of proprietary and third-party technologies and services intended to facilitate transactions efficiently and securely between millions of merchants and consumers worldwide across different channels, markets, and networks.

Our payments platform connects with financial service providers around the world and allows consumers to make purchases using a wide range of payment methods, regardless of where a merchant is located.

Consumers who use our payments platform can send payments in more than 200 markets around the world and in nearly 150 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies.

Our payments platform connects with financial services providers around the world and allows consumers to make purchases using a wide range of payment methods, regardless of where a merchant is located.

Consumers who use our payments platform can send payments in approximately 200 markets around the world and in approximately 150 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 24 currencies.

We have developed intuitive user interfaces, customer tools, transaction management databases, and payment network integrations on our platform designed to enable our customers to utilize our suite of products and services.

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GOVERNMENT REGULATION

We operate globally and in a rapidly evolving regulatory environment characterized by a heightened focus by regulators globally on all aspects of the payments industry, including countering terrorist financing, anti-money laundering, privacy, cybersecurity, and consumer protection.

We operate globally and in a rapidly evolving regulatory environment characterized by a heightened focus by regulators globally on all aspects of the payments industry, including anti-money laundering, countering terrorist financing, privacy, cybersecurity, and consumer protection.

The laws and regulations applicable to us, including those enacted prior to the advent of digital payments, continue to evolve through legislative and regulatory action and judicial interpretation.

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(a wholly-owned subsidiary) holds licenses to operate as a money transmitter (or its equivalent) in the states where such licenses are required, as well as in the District of Columbia and certain territories.

These licenses include not only the PayPal-branded products and services offered in these locations, but also our Venmo, Hyperwallet, and Xoom products and services to the extent offered in these locations.

As a licensed money transmitter, PayPal is subject to, among other requirements, restrictions with respect to the investment of customer funds, reporting requirements, bonding requirements, and inspection by state regulatory agencies.

These licenses include not only our PayPal-branded products and services, but also our Venmo, Hyperwallet, and Xoom products and services, to the extent offered in these locations.

As a licensed money transmitter, PayPal is subject to, among other requirements, restrictions on the investment of customer funds, reporting requirements, bonding requirements, and inspection by state regulatory agencies.

In certain cases, these licenses also generally cover PayPal’s service enabling customers to buy, hold, transfer, and sell cryptocurrency directly from their PayPal or Venmo account.

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and the European Union (“EU”), have implemented authentication requirements for banks and payment processors intended to reduce online fraud, which could impose significant costs, make it more difficult for new customers to open PayPal accounts, and reduce the ease of use of our products.

Banking agency supervision .

We serve our customers in the EU and U.K.

through PayPal (Europe) S.à.r.l.

Financial Services supervision .

We serve our customers in the U.K.

through PayPal U.K.

Limited (“PayPal U.K.”), a wholly-owned subsidiary that is subject to regulation as an electronic money institution in the U.K.

is authorized and regulated by the FCA from November 1, 2023.

We serve our customers in the EU (and the U.K.

through October 31, 2023) through PayPal (Europe) S.à.r.l.

et Cie, S.C.A.

(“PayPal (Europe)”), a wholly-owned subsidiary that is licensed and subject to regulation as a credit institution in Luxembourg by the CSSF.

Under the U.K.’s Temporary Permissions Regime, PayPal is deemed to be authorized and regulated by the U.K.

FCA as a result of Brexit.

Consequently, we must comply with rules and regulations of the European banking industry, including those related to capitalization, funds management, corporate governance, anti-money laundering, disclosure, reporting, and inspection.

Accordingly, we must comply with rules and regulations of the U.K.

and European banking industry, including those related to capitalization, funds management, corporate governance, anti-money laundering, disclosure, reporting, and inspection.

We are, or may be, subject to banking-related regulations in other countries now or in the future related to our role in the financial industry.

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Lending regulation .

consumer short-term, interest-free, installment product is subject to federal and state laws governing consumer credit and debt collection.

PayPal holds multiple state licenses as the lender of this product.

consumer short-term, interest-free, installment product is subject to federal and state laws governing consumer credit and debt collection, and PayPal holds multiple state licenses as the lender for this product.

holds multiple licenses for the issuance of its consumer installment products in Japan and is registered with the Ministry of Economy, Trade and Industry as a Comprehensive Credit Purchase Intermediary.

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merchant lending products are subject to federal and state regulations and are offered by an independent chartered financial institution.

Our merchant lending products offered in Germany, France and the Netherlands are subject to the laws of Luxembourg and certain local laws, and our merchant lending product offered in the U.K.

Our merchant lending products offered in Germany and France are subject to the laws of Luxembourg and certain local laws, and our merchant lending product offered in the U.K.

is subject to U.K.

The loans offered to European and U.K.

merchants are originated by PayPal (Europe).

merchants are originated by PayPal (Europe) and PayPal U.K., respectively.

Our merchant lending product in Australia is subject to the laws of Australia and originated by PayPal Credit Pty Limited.

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The CFPB has significant authority to regulate consumer financial products in the U.S., including consumer credit, deposits, payments, and similar products.

As a large market participant of remittance transfers, the CFPB has direct supervisory authority over our business.

As a larger market participant of remittance transfers, we are subject to the direct supervisory authority of the CFPB.

The CFPB and similar regulatory agencies in other jurisdictions may have broad consumer protection mandates that could result in the promulgation and interpretation of rules and regulations that may affect our business.

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Interchange fees.

Interchange fees associated with four-party payments systems are being reviewed or challenged in various jurisdictions.

For example, in the EU, the Multilateral Interchange Fee Regulation caps interchange fees for credit and debit card payments and provides for business rules to be complied with by any company dealing with payment card transactions, including PayPal.

Interchange fees (the transaction fees for processing credit and debit card transactions) are subject to regulation in certain jurisdictions.

For example, in the EU, the Multilateral Interchange Fee Regulation caps interchange fees and provides for business rules to be complied with by any company dealing with payment card transactions.

Interchange fees are being reviewed or challenged in various jurisdictions.

As a result, the fees that we collect in certain jurisdictions may become the subject of regulatory challenge.

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PayPal is subject to applicable anti-corruption laws, such as the U.S.

Foreign Corrupt Practices Act and the U.K.

Foreign Corrupt Practices Act, the U.K.

Bribery Act, and similar laws in the jurisdictions in which we operate.

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Various regulatory agencies continue to examine and implement laws governing a wide variety of issues, including virtual currencies, identity theft, account management guidelines, disclosure rules, cybersecurity, competition, and marketing, which may impact PayPal’s business.

Certain governments around the world are adopting laws and regulations pertaining to ESG performance, transparency, and reporting, including those related to general corporate ESG disclosures (e.g., the EU Corporate Sustainability Reporting Directive) as well as topical reporting and risk management requirements, such as obligations related to the management of climate-related risks.

Certain governments around the world are adopting laws and regulations pertaining to ESG performance, transparency, and reporting, including those related to general corporate ESG disclosures (e.g., the EU Corporate Sustainability Reporting Directive) as well as topical reporting and risk management disclosure requirements, such as obligations related to disclosure of the management of climate-related risks.

For an additional discussion on governmental regulation affecting our business, please see “Item 1A.

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Legal Proceedings” included in this Form 10-K.

ESG MANAGEMENT

PayPal is committed to creating a more inclusive global economy and advancing our core values of Inclusion, Innovation, Collaboration, and Wellness across our communities, workforce, and strategies.

We manage priority ESG risks and opportunities organized across responsible business practices, employees and culture, social innovation, and environmental sustainability.

We believe this integrated, enterprise-wide approach to managing our global business responsibly helps to enable us to create value for our stakeholders, including our stockholders, employees, partners, and communities.

We continue to advance and prioritize efforts to manage key non-financial factors critical to our long-term business, including further enhancements to support the safety and security of our products and platform, ongoing programmatic development intended to foster an inclusive culture across the employee experience, and progress on our science-based approach to reducing our climate change impacts.

We take this commitment seriously and endeavor to provide transparent disclosures on our progress through our annual Global Impact Report and other communications.

HUMAN CAPITAL

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As of December 31, 2023, we employed approximately 27,200 people globally, with 45% in the Americas, 42% in Asia-Pacific, and 13% in Europe and the Middle East.

Our global employees work predominantly full-time and represent nearly 150 nationalities, across 27 countries, including approximately 11,800 located in the U.S.

Attracting, recruiting, developing, and retaining diverse talent enables us to provide our customers with products and services that help them to thrive in the global economy, and serve our other stakeholders.

In 2022, we developed 12 leadership principles based on our four core values that establish a common set of expectations for all employees.

We began integrating these principles across our global talent strategy to help shape our programs throughout the employee lifecycle and achieve key business priorities.

We also remain focused on promoting the physical, mental, and financial wellness of our employees, particularly as our workforce continues to navigate changes in where and how we work.

Our global employees work predominantly full-time and represent 144 nationalities, across 27 countries, including approximately 10,200 located in the U.S.

Attracting, recruiting, developing, and retaining diverse talent enables us to provide our customers with products and services that help them to thrive in the global economy.

In 2023, we continued to build employee awareness and engagement in our leadership principles, which were launched in 2022, to establish a common set of expectations for all employees.

We continued to integrate these principles across our global talent strategy to help shape our programs throughout the employee lifecycle and achieve key business priorities.

A year after launch, 78% of employees responding to a global survey reported that the leadership principles are now part of their day-to-day work.

We also remain focused on promoting the physical, mental, and financial wellness of our employees, particularly as our workforce continues to navigate changes in where and how we work and operate in a dynamic and competitive environment.

Employee engagement

We use employee feedback to directly inform the ongoing development of our employee programs.

In addition to administering an annual survey to gather input from our global workforce, we also conducted specific surveys to gather direct employee feedback on our internal communications approach and evolving workplace preferences.

For our 2022 annual employee survey, we heard from 83% of our global employees.

Our engagement score, which reflects employees that would recommend PayPal to their peers and/or are happy at PayPal was 79%.

In addition to administering an annual survey to gather input from our global workforce, we also conducted specific surveys to gather direct employee feedback on our specific topics.

This year, our 2023 annual employee survey was conducted in September, between the announcement of the appointment of Alex Chriss as PayPal’s new CEO and his assumption of the role.

We heard from 82% of our global employees.

Our engagement score, which reflects whether employees would recommend PayPal to their peers and/or are happy at PayPal, was 77%.

Our score measuring intent to stay was 77%, which reflects an employee’s expectation to remain employed with the company in two years.

Additionally, we observed improvements in employee scores regarding collaboration and manager support.

In 2022, we enhanced our survey to incorporate viewpoints on the employee experience, diversity, inclusion, equity, and belonging (“DIE&B”) efforts, and our leadership principles, including specific questions on working style and strategic direction.

The detailed scores are shared across the organization and analyzed to understand differences by geography, demographics, business function, and job level, and to help identify opportunities for further improvement.

Talent acquisition, development, and retention

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We believe that a strong culture focused on employee experiences that enables advancement, learning, and individual career insights is essential to the successful acquisition, development, and retention of diverse talent.

Accordingly, we have implemented programs focused on inclusive hiring practices and extending our talent pipeline through targeted partnerships, reimagined our career development program for individuals and managers, extended individual coaching and mentorship programs (particularly for underrepresented and technical talent), and advanced efforts for employees to grow through self-paced and community learning experiences.

Accordingly, we have implemented programs focused on inclusive hiring practices and extending our talent pipeline through targeted partnerships, revise our career development program for individuals and managers, extended individual coaching and mentorship programs (particularly for technical and underrepresented talent), and advanced efforts for employees to grow through self-paced and community learning experiences.

Employee wellness

We remain focused on promoting the holistic well-being of our employees, including resources, programs, and services to support our employees’ physical, mental, and financial wellness.

In 2022, our initiatives included extending our Global Wellness Days for all employees to take time to rest and recharge, providing resources, trainings, and workshops to foster emotional well-being, preserving workplace flexibility through Crisis Leave and other programs, and strategically extending employee benefits to additional global markets.

We also continued our efforts to strengthen employee financial wellness, including offering individual employee financial coaching, promoting the prioritization of employee financial health across the private sector through the Worker Financial Wellness Initiative, and improving our internal measurement and evaluation approaches to identify targeted opportunities for further enhancements.

Benefits include Global Wellness Days for all employees, resources to foster emotional well-being, and providing workplace flexibility through Crisis Leave and other programs.

We promote employee financial wellness, including by offering individual employee financial coaching.

Through our global Community Impact program, we support our employees’ individual passions and communities by matching eligible employee donations and volunteer time with non-profit organizations up to $2,500 annually per employee.

Diversity, inclusion, equity, and belonging

We believe that fostering DIE&B is critical to our global talent strategy and pivotal to building a culture that embraces individual characteristics, values diversity, minimizes barriers, and enhances feelings of security and support across the workplace.

We are committed to equal pay for equal work, promoting enterprise-wide inclusive learning opportunities, and partnering with leading organizations to embed DIE&B considerations into our talent strategy.

We believe that fostering diversity, inclusion, equity, and belonging (“DIE&B”) is critical to our global talent strategy and pivotal to building a culture that embraces individual characteristics, values diversity, minimizes barriers, and enhances feelings of security and support across the workplace.

We are committed to equal pay for equal work and promoting enterprise-wide inclusive learning opportunities.

We believe that our strong commitment to DIE&B is evident at all levels of the organization from our Board of Directors to our executive leadership team to our global workforce.

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Workforce representation is only one aspect of our broader DIE&B strategy.

Through the leadership of our Global Head of DIE&B and dedicated DIE&B team, along with functional collaboration and accountability, we are focused on strengthening existing efforts and piloting new initiatives to promote an inclusive culture.

In 2022, we continued our support for underrepresented communities and employees through activities such as enhanced strategic partnerships, new learning modules to promote effective sponsorship and inclusive performance management, and new tools and resources to incorporate DIE&B considerations across the business.

In 2023, we continued our support for underrepresented communities and employees, including through activities such as inclusion-focused employee learning modules and our enterprise-wide sponsorship program.

We continue to evaluate DIE&B progress across the company and as part of the individual performance assessment under our 2023 annual incentive plan for our senior executives.

In addition, we empower eight employee resource groups to promote community and belonging for employees that identify as Black, Latinx/Hispanic, women, interfaith, veterans, LGBTQ+, Asian, and disabled persons and their allies.

These groups drive ongoing employee engagement around the world for all employees, regardless of background, to support and champion their peers and related causes.

In addition, we empower eight employee resource groups, which are open to all employees, to promote community and belonging for employees that identify as Black, Latinx/Hispanic, women, interfaith, veterans, LGBTQ+, Asian, and disabled persons and their allies.

Our evolving workplace

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We believe this flexible approach has broadened our potential global talent pools.

As part of our annual ESG reporting, we provide additional information on our global talent strategy, including detailed representation metrics, in our Global Impact Report.

AVAILABLE INFORMATION

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Our website is located at www.paypal.com, and our investor relations website is located at https://investor.pypl.com.

From time to time, we may use our investor relations site and other online and social media channels, including the PayPal Newsroom (https://newsroom.paypal-corp.com/), Twitter handles (@PayPal and @PayPalNews), LinkedIn page (https://www.linkedin.com/company/paypal), Facebook page (https://www.facebook.com/PayPalUSA/), YouTube channel (https://www.youtube.com/paypal), Dan Schulman’s LinkedIn profile (https://www.linkedin.com/in/dan-schulman/), Gabrielle Rabinovitch’s LinkedIn profile (https://www.linkedin.com/in/gabriellerabinovitch/), Dan Schulman’s Facebook page (https://www.facebook.com/DanSchulmanPayPal/), and Dan Schulman’s Instagram page (https://www.instagram.com/dan_schulman/) as a means of disclosing information about the Company, including information which could be deemed to be material to investors.

From time to time, we may use our investor relations site and other online and social media channels, including the PayPal Corporate website (https://about.pypl.com), the PayPal Newsroom (https://newsroom.paypal-corp.com/), PayPal’s LinkedIn page (https://www.linkedin.com/company/paypal), Alex Chriss’ LinkedIn profile (https://www.linkedin.com/in/alexchriss/), Alex Chriss’ X profile (https://twitter.com/acce), and Jamie Miller’s LinkedIn profile (https://www.linkedin.com/in/jamiesmiller/), as a means of disclosing information about the Company, including information which could be deemed to be material to investors.

Our Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge on our investor relations website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business