In an interview, PayPal’s Chief Financial Officer, John Rainey explained about PayPal’s strengths and weakness. According to John, PayPal saw three areas that put pressure on business: lingering ties to eBay, currency discrepancies and “pockets” of slower growth in some regions of the world.
Moreover, Rainey added, “But while these potential weaknesses may persist in early 2019, PayPal is seeing longer-term tailwinds tied to the rise of digital payments and the number of people with mobile phones who don’t have easy access to traditional financial services.”
Fourth-quarter earnings report review result
The fourth-quarter earnings report submitted by PayPal disappointed Wall Street with the exception of the almost-profitable digital wallet Venmo, which may have stemmed from the company’s forward guidance.
Rainey also emphasized that management was really pleased with the fourth-quarter results, highlighting the company’s 26-percent earnings per share growth and its record-breaking net new customer additions.
However, there have been three potential painful factors in PayPal’s first-quarter steerage that had been valued addressing. Due to these factors, the monetary expertise firm’s shares dropped 3.96 %.
Three impact factors according to the PayPal CFO
Mentioning about PayPal’s former parent company, John said that eBay is the first factor which impacted the business of his company. Further, he stated that they still have 10 percent of the volume of their platform, which is eBay’s business. And, the slower growth of eBay is negatively affecting their business.
The second factor is for the San Jose, California-based company that has to do with the strength of the U.S. dollar. The problem arises due to the conversion of foreign earnings into fewer U.S. dollars due to the dollar’s strength against other currencies.
Another major problem is that PayPal’s most of the business is cross-border and therefore a stronger dollar compared to other currencies affects their business. Ultimately, the cross-border business tends to increase the currency pressure.