PayPal Holdings Inc released its projected revenue and profit in the first quarter that fell short of expectations. The company is taking a direct hit from eBay’s separation from its payment services.
Paypal’s operating agreement with eBay has lapsed and the shift of the online marketplace to its own payment platform is affecting transaction volume. Shares fell 17.4%.
The eBay transition is expected to put $600 million of revenue pressure in the first half of this year, Chief Executive Dan Schulman said.
Revenue growth is forecast to slow further this quarter, with PayPal forecasting a 6% increase, much less than the 11.7% growth forecast by analysts.
PayPal processed $340 billion in payments in the quarter, up 23% from a year earlier, while its peer-to-peer payment service Venmo processed $61 billion in payments.
The California-based company added 9.8 million new active net accounts in the last quarter, including 3.2 million accounts from the purchase of Paidy, the Japanese buy-now-pay-later company it acquired in September 2021.
As a result, total revenue in the fourth quarter rose 13% to $6.9 billion and earned $1.11 per share, both in line with previous forecasts.
For more information, read the original story in Reuters.