Consumers' Love for PayPal Has Not Wavered Despite Increased Competition and Leadership Changes

Investor concern about PayPal hasn’t translated to consumers, who trust the brand as much as ever, but the firm may have hit a ceiling as competitors catch up, writes financial services analyst Jaime Toplin
Morning Consult artwork by Ashley Berry
December 06, 2023 at 5:00 am UTC

Key Takeaways

  • Over 3 in 5 U.S. adults trust PayPal to do what’s right — a figure that has remained remarkably consistent over the last several years. The brand’s sky-high favorability also outpaces its rivals, giving it considerable capital with its customers as it innovates. 

  • PayPal recently brought in a new CEO to help reinvent the brand following stalled growth, increased competition and investor concern, but these challenges are not necessarily trickling down to consumers’ views of the brand. 

  • Yet it will be important for PayPal to keep an eye on its peers. While they still trail PayPal considerably across key metrics like users, trust and favorability, they have momentum. This should keep the pressure on the company to maintain positive consumer relationships and accelerate innovation. 

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PayPal is in a period of transition. Ultra-fast pandemic-era growth in digital payments has normalized — a shift that spooked investors and sent stock prices tumbling. To help navigate that turmoil, the company appointed a new CEO, Alex Chriss, who took the reins in late September. In his brief tenure at the company, Chriss has already doubled down on core initiatives like checkout and consumer products and reshuffled executives.

 These changes had the potential to make considerable noise, since 98% of U.S. adults are aware of PayPal — figures on par with tech giants like Amazon, Google and Facebook. Understanding whether internal shake-ups and investor concern have trickled down to consumers is critical not just for PayPal in shaping its own path forward, but also for financial services competitors looking to understand market dynamics and identify gaps where they can compete.

What we do that’s different: Brand data used in this analysis is available exclusively in Morning Consult Intelligence, an exclusive online platform tracking consumer attitudes daily on key indicators for nearly 4,000 brands in 40+ markets.

What Morning Consult Intelligence tracks: Globally, we ask consumers daily about awareness, trust, purchasing behaviors, favorability, net promoter score and buzz. This depth and frequency offers an exclusive, real-time pulse identifying changes in consumer opinion.

Consumers’ love for PayPal has translated into lasting trust

PayPal’s favorability is sky-high. Nearly 2 in 5 U.S. adults who are aware of the brand view it “very favorably” (39%), and an additional 36% see it “somewhat favorably.” Just around 10% combined view it either “somewhat” or “very unfavorably.” Favorability is even stronger among the brand’s users: 88% rate the brand as favorable, 13 percentage points higher than all respondents aware of PayPal. 

PayPal’s Favorability Is Sky-High

Shares of respondents aware of PayPal who said whether they have a favorable or unfavorable impression of PayPal:
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Source: Morning Consult Brand Intelligence

Favorability remains solid across generations, too. Gen Xers and millennials view the brand slightly more favorably than the public at large, but PayPal also performs quite well among baby boomers and Gen Zers. Well over half of each generation has a favorable impression of the brand. This is likely for different reasons: For example, baby boomers might gravitate toward PayPal because of its legacy status among fintechs, while digital native Gen Zers are likely open to using it for its convenience, even if they also like competing services.  

High favorability has translated into lasting trust. About two-thirds (63%) of U.S. adults say they trust PayPal to do what is right in Q3 2023, with trust among users of the brand closer to three-quarters (77%). The only group where trust dips is among non-users, and they mostly have no opinion on the brand — distrust remains slim. And this trust has endured: From when Morning Consult began tracking the brand in December 2017 until November 2023, trust has never fallen below 57% — similar to the average consumer’s trust in financial services overall. This lingering sentiment, which remained strong through the pandemic, should be a marker of the company’s strong relationships forged with users, and shows its promise for the future.

Trust in PayPal Is Consistently High Among Users

Shares of respondents who said they trust PayPal “a lot” or “some” to do what is right
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Source: Morning Consult Brand Intelligence

PayPal’s age and reputation have propelled it to the top of the industry

PayPal counts around 430 million active consumer and merchant accounts, per the company’s Q3 2023 earnings report. This strong penetration — around 7 in 10 U.S. adults report using the brand — has likely helped PayPal grow its engagement. The company has reported that annual transactions per account grew 13% on a year-over-year basis in Q3, partially driven by use of non-branded services, like Braintree, that could stretch PayPal’s reach beyond what the average user is aware of, in addition to services like Venmo and branded checkout.

This user base far outpaces digital wallet peers like Apple Pay, Google Pay, Cash App, Zelle, and Venmo (which PayPal owns). Some of PayPal’s size is likely a result of its age: The service is well over a decade older than some of its rivals, which has given it more time to build up users, and especially win over older customers more nervous about digital payments technology. PayPal also offers a wider variety of services than its peers, which could make it appealing to a larger base of consumers. But some of this is likely also a result of perception, given that PayPal’s favorability and trust considerably outpace that of its peers. 

PayPal Outperforms Peers Across Key Metrics — but They’re Growing

Share of U.S. adults who say they use, have a favorable impression or trust the following services:
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Source: Morning Consult Brand Intelligence

However, PayPal’s performance across metrics over the last year is stagnant, while the competition grows. It’s worth mentioning that PayPal has limited room to grow, because of how high its ceiling is. But the landscape is changing. For example, Zelle’s favorability grew by 22 points between Q1 2020 and Q3 2023, while PayPal’s favorability held nearly steady. A similar trend is true for trust in both brands: The share of U.S. adults who said they trust Zelle to do what is right increased 20 points over the same time period, and trust in PayPal stayed relatively consistent.  

PayPal is set up for success going into 2024, but it needs to step on the gas

PayPal’s growth challenges are more a picture of a maturing industry than a company in a backslide. Consumers have long adored PayPal, and nothing indicates that will change any time soon, especially as the company continues to launch new services and improve the user experience. Its performance is likely reflective of a broader industry pattern of slowing pandemic-era growth rather than a company with specific struggles. 

Further, its large user base and enduring, steady relationship with customers should set it up for success. The strong ties the brand has built with its audience give it a foundation to innovate, experiment and build new tools. But the brand’s push to double down on branded products like checkout and consumer wallets under the new CEO is likely a smart one; its high regard and favorable perception should help grow use of products attached to the brand name. 

But increasing competition should keep the pressure on for innovation. Though PayPal’s peers still trail the firm in users, favorability and trust, they’re growing rapidly while PayPal stays consistent. As rivals diversify with the aim of becoming multi-purpose products that more directly compete with PayPal — Cash App just launched a savings account, and Apple Pay is dabbling in open banking, as two examples — PayPal will need to ensure it doesn’t squander its advantage, or else competitors could move in.

This memo utilizes data from Morning Consult Brand Intelligence, our flagship platform that every day asks thousands of consumers about core metrics for over 4,000 brands and products around the world. MCBI subscribers can further explore the data here. To learn more about MCBI, request a demo here.

A headshot photograph of Jaime Toplin
Jaime Toplin
Senior Financial Services Analyst

Jaime Toplin previously worked at Morning Consult as a senior financial services analyst.

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