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PayPal's Checkout Recovery: Can Branded TPV Reaccelerate?
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Key Takeaways
PayPal's branded checkout TPV grew 2% currency neutral in Q1 2026, up from 1% in the prior quarter.
PYPL posted 8% currency-neutral TPV growth and 5% currency-neutral revenue growth in Q1 2026.
PayPal is investing in checkout and sees U.S. improvement, while Europe remains softer.
PayPal Holdings’ (PYPL - Free Report) branded checkout recovery is becoming one of the most important questions for PYPL investors. In the first quarter of 2026, online branded checkout total payment volume (TPV) grew 2% on a currency-neutral basis, improving from 1% in the prior quarter. While that is not a full turnaround yet, it signals that PayPal’s core checkout business may be stabilizing.
The company’s broader results provide some support for the recovery effort. TPV reached roughly $464 billion, up 8% on a currency-neutral basis, while revenues increased 5% currency neutral. PayPal also reported stronger Venmo and enterprise payment growth, showing that demand across the platform remains healthy even as branded checkout moves more slowly.
Management is trying to reaccelerate checkout through better execution. The new operating model places Checkout Solutions & PayPal under a clearer structure, combining consumer and merchant efforts. PayPal is also investing in checkout experience, merchant presentment, consumer selection, rewards and loyalty, especially around top merchants where conversion can matter most.
The challenge is that the recovery is uneven. Management noted improvement in the United States, but Europe remains softer, with pressure in markets such as the U.K. and slower growth in Germany. Macro softness, travel weakness, local competition and PayPal’s own execution gaps all appear to be weighing on momentum.
Branded TPV can reaccelerate, but likely gradually. PayPal’s trusted brand, large two-sided network, Venmo integration, BNPL strength and merchant reach remain real advantages. However, investors should watch if 2% growth becomes a trend, Europe stabilizes and checkout investments improve selection and repeat usage without creating too much margin pressure.
How Are Block and Adyen Competing?
Block (XYZ - Free Report) , through Square and Cash App ecosystems, remains a significant competitor to PayPal in digital payments and merchant services. The company benefits from a large merchant base, integrated commerce solutions and growing consumer engagement. If PayPal’s branded checkout recovery remains gradual, Block could continue strengthening its competitive position among merchants seeking streamlined payment experiences.
Adyen (ADYEY - Free Report) is another key competitor benefiting from its global enterprise payments platform and strong relationships with large merchants. The company continues to expand internationally while emphasizing payment optimization and seamless checkout experiences. If PayPal’s branded checkout softness in Europe persists, Adyen could be well-positioned to capture additional payment volume from enterprise merchants.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have declined 5.2% in the past three months, underperforming both the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 7.69X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 16.90X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions remain unchanged. The Zacks Consensus Estimate for full-year 2026 EPS is pegged at $5.30 over the past two months.
View the Zacks #1 Rank List
Image: Bigstock
PayPal's Checkout Recovery: Can Branded TPV Reaccelerate?
Key Takeaways
PayPal Holdings’ (PYPL - Free Report) branded checkout recovery is becoming one of the most important questions for PYPL investors. In the first quarter of 2026, online branded checkout total payment volume (TPV) grew 2% on a currency-neutral basis, improving from 1% in the prior quarter. While that is not a full turnaround yet, it signals that PayPal’s core checkout business may be stabilizing.
The company’s broader results provide some support for the recovery effort. TPV reached roughly $464 billion, up 8% on a currency-neutral basis, while revenues increased 5% currency neutral. PayPal also reported stronger Venmo and enterprise payment growth, showing that demand across the platform remains healthy even as branded checkout moves more slowly.
Management is trying to reaccelerate checkout through better execution. The new operating model places Checkout Solutions & PayPal under a clearer structure, combining consumer and merchant efforts. PayPal is also investing in checkout experience, merchant presentment, consumer selection, rewards and loyalty, especially around top merchants where conversion can matter most.
The challenge is that the recovery is uneven. Management noted improvement in the United States, but Europe remains softer, with pressure in markets such as the U.K. and slower growth in Germany. Macro softness, travel weakness, local competition and PayPal’s own execution gaps all appear to be weighing on momentum.
Branded TPV can reaccelerate, but likely gradually. PayPal’s trusted brand, large two-sided network, Venmo integration, BNPL strength and merchant reach remain real advantages. However, investors should watch if 2% growth becomes a trend, Europe stabilizes and checkout investments improve selection and repeat usage without creating too much margin pressure.
How Are Block and Adyen Competing?
Block (XYZ - Free Report) , through Square and Cash App ecosystems, remains a significant competitor to PayPal in digital payments and merchant services. The company benefits from a large merchant base, integrated commerce solutions and growing consumer engagement. If PayPal’s branded checkout recovery remains gradual, Block could continue strengthening its competitive position among merchants seeking streamlined payment experiences.
Adyen (ADYEY - Free Report) is another key competitor benefiting from its global enterprise payments platform and strong relationships with large merchants. The company continues to expand internationally while emphasizing payment optimization and seamless checkout experiences. If PayPal’s branded checkout softness in Europe persists, Adyen could be well-positioned to capture additional payment volume from enterprise merchants.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have declined 5.2% in the past three months, underperforming both the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 7.69X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 16.90X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions remain unchanged. The Zacks Consensus Estimate for full-year 2026 EPS is pegged at $5.30 over the past two months.
Image Source: Zacks Investment Research
PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.