PayPal is getting new features including Fastlane checkout and AI products

PayPal is rolling out some artificial intelligence (AI) products and new features.

PayPal is getting new features including Fastlane checkout and AI products
The PayPal logo is seen at an office building in Berlin, Germany, March 5, 2019. REUTERS/Fabrizio Bensch/File Photo

The backstory: Online payments giant PayPal is known for its secure money transfers, but it's made some big moves over the last decade. It acquired Venmo in 2013, a mobile payment service that made splitting bills among friends easy. It also stepped into the cryptocurrency world, allowing US users to buy, sell and hold digital currencies. But PayPal's stock hasn't been doing so well, dropping by more than 22% since January 2023. 

Recently, there was a change in leadership at the company. Alex Chriss was named PayPal's CEO last August, replacing long-time CEO Dan Schulman in September. Chriss, who led Intuit through a US$12 billion acquisition of Mailchimp, impressed the PayPal board and was selected out of nine candidates, with investors hoping he could help the stock price make a comeback.

More recently: Chriss, in an interview with CNBC earlier this month, teased some exciting changes, saying they would "shock the world." PayPal announced upgrades, including letting users earn cash back through the app and making online checkouts smoother with a new one-click feature that makes payments easier after you save your details. For businesses using Venmo, there was good news, too. The company would introduce handy "subscribe" buttons, letting them promote themselves better and giving customers personalized recommendations.

The development: Now, PayPal is also rolling out some artificial intelligence (AI) products. Chriss is thinking big for 2024, aiming to boost revenues beyond just online transactions. Last Thursday, he announced new AI-driven products, like letting sellers reach new customers based on their shopping history. Another AI-based tool, "smart receipts," will give personalized suggestions and cashback rewards to customers in their receipts. Fastlane, a one-click checkout, has also made things faster by almost 40% in early testing. 

As PayPal gets ready to report its fourth-quarter earnings on February 7, the tech sector is riding high. The S&P 500 index is hitting record highs, partly driven by investor confidence in the AI boom.

Key comments:  

"The outcomes of the innovations ... are promising and should improve consumer and merchant experiences," said Andrew Harte, an analyst at BTIG, in a research note. "That said, we do not think investors will view any of them as groundbreaking new information, but instead initiatives they would have expected the company to already be working on."

"We're about to embark on the next trend," said PayPal CEO Alex Chriss in an interview. "We're now going to be focusing on AI personalization of commerce."

"We have opportunities to accelerate our revenue growth while reducing our expenses, helping further drive operating leverage," said Chriss on a call with analysts in November, adding the company is working on a comprehensive plan for 2024.