PayPal Holdings, Inc. (PYPL) Earnings Call Transcript & Summary

Get the ball rolling in. First of all, thank you again for all joining us. Day 2 of the Wolfe FinTech Forum. Really happy to have a company that we've spent probably way more time on than just 1 company usually gets in terms of our own energy, but we love covering PayPal. So much exciting -- so many exciting things going on around it, so we do a lot of research around it. And so really happy to have you guys with us. We have John who is the new Chief Product Officer of the company with us. We have Gabrielle, who is the acting CFO and Investor Relations; and Ryan and the team in Investor Relations and others as well. So guys, thank you all for joining us. Really great to have you.

John, maybe just -- you just came into this role, what, 6 months ago now or so?

That's right.

It's not too long ago. But obviously, it was a role that I think a lot of investors were eager to see filled, really to understand what you can do and what you're doing to really innovate around the company and help the company progress in the next stage. So maybe before we even get into some of the weeds on this, if you could just give the audience a bit of your background on yourself, your role at PayPal as Chief Product Officer, a little more context.

Yes, absolutely. So my background is I started off a very traditional career at banking and consulting. I joined an Internet company called Overture, which was -- invented paid search. We had no idea at the time that it will be a revolution. We got acquired by Yahoo!, where I ran strategic and product marketing. Joined a couple of start-ups and ended up becoming Chief Product Officer at Expedia and then President of Vrbo, where, back in the day when we bought it, was called HomeAway. And then became President of Platform Marketplaces at Expedia and then President of Marketplaces. We reorganized around Marketplaces. And then -- and now I'm here as Chief Product Officer of PayPal. And so my responsibilities include basically helping the merchant side of the business, that business unit, which includes Braintree and Hyperwallet and all of its merchant products as well as the consumer side, which includes Venmo and PayPal core.

So John, just maybe start off by what drew you to PayPal. And I'm sure you had a lot of opportunities, given your extensive background. So just help us with that first.

Yes. So there's 2 main reasons why I joined PayPal. The #1 reason is that when you're on the merchant side of the business, PayPal is one of the strongest allies that you have in regard to being able to drive performance for a merchant. And it really -- it's -- by the way, when we had bought Vrbo, Vrbo was really an SEO side, didn't have a lot of commerce capabilities. And PayPal was the one thing that all of the employees of Vrbo pounded the table for. Because you can't operate a global business without PayPal especially in Europe and especially in Germany. So that was one of the core reasons that we ultimately partnered with them. The other reason Vrbo was Hyperwallet, the capabilities to do payouts, it's an incredible capability. What I thought was lacking before I joined...

From PayPal?

Yes. What I thought was lacking at Expedia to join PayPal, what excited me about it was, I always felt like they could do more, way more for our business. And when you're running the merchant business, it's kind of lonely, meaning you're trying to crank out conversion, you're trying to crank out performance. And I always felt like PayPal could be a better partner. So some of that now is coming into the DNA in regard to how we approach the merchant business. I've loved the consumer product, but at the time, I didn't know all of the things that they could do, and I think there's a real opportunity to bring it all together for consumers.

So on that note, I mean, it's been a few months. Just give me a little more detail on what you've been seeing and what's the positive surprises, maybe the negative surprises, what you're really excited about.

Yes. I'll say the big opportunity in my mind is that PayPal is a marketplace. So they have 35 million merchants. They have 400 million users. But it's sometimes hard to figure out what do they do for each other. So on the consumer side, are they even aware that we have 35 million merchants? Yes, they see the convenience of the button everywhere. But outside of that, there's not a lot of value that's being driven to the consumer side. So I think the consumers feel it. Other than convenience, they're not getting a lot. And there could be a lot more. And I could talk about some of those capabilities. On the merchant side, I feel the same way, which is they know about the reach, they know about the scale. They love the community. They love the penetration of certain geos. But then outside of that, what are we providing merchants that we think of that value add? That's the start of the real network effect. And so in my mind, the real opportunity is over the next year, how do you start to design that, how do you start to put it together, how do both sides of the marketplace really feel it? And then the last leg of that is, how does PayPal productize its data so that it's easier and easier to innovate for both sides? So those are really the big themes.

Look, checkout experience, obviously, is a hot topic and improving or reducing friction around checkout is similarly a hot topic in terms of what could potentially help improve the number of transactions and the competitive dynamics. But just maybe putting it on to your plate now, I mean, what do you see as your priorities, whether it's that or it's -- just share your thoughts on areas of product side that are top of mind for you and your team. Where have you been spending most of your time since you've been there?

Yes. So on the merchant side of the business in regard to where I spend the most time is really thinking about our Braintree products, which is our unbranded payment processing. I would say that if you start to think about the unbranded business, most of the solutions you're really focusing on this auth rate for the payment. And this auth rate is incredibly important for the merchant because even 1 bp, it costs them a lot of money. So you're trying to squeeze and squeeze and squeeze and ensure that you can improve those auth rates to really lower the overall cost payment. And then I think the biggest opportunity is for PayPal to move slightly upstream, where we can impact conversion for the merchant. And now you're talking about hundreds of bps. And so we've got to really, really just shift our focus from, okay, we've optimized payment stack. Let's move slightly upstream. Let's see if we can help basically optimize the checkout flow and then provide way greater value for the merchant. And when you start to think about like what PayPal owns its assets, with all of its data, it should be actually be able to do quite a reasonable job, especially for the mid-tier and below because we have a lot more data we can optimize more effectively. And then we can provide better solutions for our enterprise merchants.

And that's on the merchant side, right?

Yes.

I mean, is that something that you see as having an ability to tackle in a realistic time frame or...

Yes. I'd say, actually, it's going very well. Last year, a lot of the focus is that because Braintree scaled so fast, we had to focus a lot more on stability as, hey, let's just make sure this payment stack is stable. Also, our merchants can make a decision in real-time in regard to how they want to process those payments. So if it's not stable, then they can swap that payment traffic over to another provider. So that was a real critical focus in regard to just making sure that everything is working really, really well. And then the other thing is just making sure implementations are designed the way, that as we want to push out products, we can do it through the existing implementations. So that's been a journey. And so as those things are in place, you can see us drive product much faster because the implementations are already there.

So that's helpful in the merchants, right? Broadly speaking, and I just want to mention that like over the past several years, there's been a perception that sometimes, PayPal could be more quick in their innovation, right, and just progress a little more rapidly in some of the different initiatives you've made. Touch on that for a little bit. I mean is that something you think you can help with the acceleration of?

Yes, I think so, and I'll talk about 2 points. Number one is that when you come into an organization like this and they have 2 sides in the marketplace, you can't actually do product development in the same way. So the way that you might think about Braintree and solving a problem for Uber is a very precise exercise. They want this exact same thing to happen. Here's how exactly their technology works. Here's the type of decisions that they want made and where they want the payment stack. When it comes to the consumer side, the way to think about it is you don't really know what the consumer wants. You may have ideas, you can test some things, but you have to quickly iterate. And I think for PayPal, where I feel like we'll add a lot of value is that you should have 2 distinct product development processes and not try to make them the same, and that's a big mistake. So we're kind of unwinding, hey, those things should not be the same. We should have different approaches. And I think on the consumer side, we can be way more rapid. And then I think the ultimate thing that does slow you down a little bit but it's worth it is just making sure that you're hitting all of your compliance, hitting all of your regulatory requirements. It slows you down slightly. And then as long as you have a framework for that, you have systems that can make that easier to actually execute, it'll allow us to go a lot faster.

Okay. All right. Why don't we shift gears now specifically to Checkout and the experience and the friction around it and possible improvements, which if there are initiatives that PayPal started before you even came on, I think, right?

That's right.

And we've definitely seen some progress. We've actually had FIDO Alliance here yesterday talking about passkeys and how much they see that being adopted in the market, including with PayPal. But maybe you could just help us understand. I mean what have you seen so far on that front? What kind of progress in your eyes are you seeing relative to your initial expectations?

Two things, right? So when it comes to -- I'll do unbranded checkout and then we'll do branded. So on the unbranded side, I see a ton of progress, which is we're stabilizing this thing, we're winning deals, the quality of that work and the reputation is growing. So I feel great about this business.

Yes. I mean Braintree's growth rates have kind of spoken for themselves.

So it's an amazing property. On the branded side of the business, I think the key is customer engagement. That's really how you drive it. The reason why I say that is that the PayPal button is almost everywhere, so there's not a lot more merchants to go chase. You're not trying -- I mean, right now, it's all long tail. So if you want to get further penetration, you have to figure out how do you get in the long tail. And even there, you have big partners like Shopify that solve a ton of problems there. So then the question is, how do you ensure that the consumer chooses PayPal in the checkout and that you're giving them a good experience and that you're also providing them value above and beyond just the hey, we're a wallet that stores your cards. That's just been a big area of opportunity and an area of focus for us this year.

So that's the areas you've identified since you've been there, I guess?

That's right. That's right.

Just maybe continuing on that theme since it's so important. I mean we talked about various initiatives that are hoping to -- we're hoping to see improve the actual experience. Latency, I know, is a concept that we've talked about a lot with you guys. One-click checkout, removing the need to enter your password, as I just brought up passkeys before, but help us understand some of those initiatives a little bit further, if you don't mind, and what you're seeing.

Yes. And it goes back to this idea that we have to move upstream from just basically trying to improve auth rates to helping Checkout. The ultimate vision for Checkout is you start to think, what is the simplest way to think about it, is you really just have to democratize one-click checkout for everything, right? You have to be able to go to a site and make it as easy as you just have to click this button. And there's a lot of reasons to believe that with the data that we have, which is we already capture basically your name, your address, your credit card numbers, what your preferences are. So then the question is then how do we intelligently put that all back in a wrapper so that it's just one click. So that's where it's going and that's where you can see, hey, you'd improve the merchant performance not by 1 bp at a time but hundreds of bps at a time. So that's where we see as a big opportunity and an area of focus. And so you may have heard of Accelerated Checkout is one of the initiatives. I think I don't like that name because it doesn't aptly describe all the things that we're doing. And so I'll give you another example is part of that in regard to thinking about that overall relationship, we introduced this feature called Package Tracking.

What's it called? Package Tracking?

It's called Package Tracking. So what we give the consumer an option to do is if they buy something from a merchant, they can say, "Hey, I want to track that." And so in the app, we give them tracking notifications, where it is in transit. We show it to them on a map and then we say, "Hey, it's arrived." So we tell you that full time. Merchants love it. Now here's the reason why. It's because a lot of merchants get hit with a charge-back saying, "I didn't receive my item." Or sometimes they receive the item, it's a list of things, and it's only one item that they're missing. Or it's -- but you put chargeback on the whole thing. So for a merchant, it's incredibly disruptive. And with a feature like this, you're now helping kind of chip away at that. You can resolve some of the chargebacks that they're seeing because of that because you now have a record. And then you can provide some innovation, which is, "Hey, here's your total receipt." If you didn't receive an item, just get down to the item. Don't do the whole receipt. So you can imagine the value add that you provide a merchant is incredible. And then for the consumer, they love it because this is convenience. So as you go down that theme, there are so many things that we want to do on behalf of the merchant where you can use our PayPal services, our data and then we provide value adds to both sides of the marketplace.

One-click checkout, to me, still seems like it's probably a must really to compete in this world. So I mean you talked a little bit more about the merchant side and what the merchants love and, to some degree, the benefits to the consumer. But I'd love to hear a little bit more about that. I mean is that something that, sure, a lot of folks in this room are PayPal users, probably most, and what can we, as users, expect to see tangibly in the next few months?

I think tangibly -- so for Package Tracking as an example, you'll see that now roll out. And then as that rolls out, you'll see a lot of our merchants are interested, you'll see a lot of coverage around that particular feature. For when it comes to one-click checkout, I think the way to think about it is you all talked about passwordless. That's the start of it, right, which is that's one of the more painful steps in the overall checkout process. Then what's next? You say, "Hey, is the form filled out with all of the correct information?" By the way, now, it's not always. And so making sure that, that is accurate. What's the third thing? Well, do you have a vault of all of the necessary financial instruments to make basically good decisions around how you want to go purchase. And then is there enough of a pattern around that so that I can actually default it to the right things? So as you start to think about that one-click checkout journey, it's just about going step by step and just -- and also in parallel, to make sure that all of these things are easier and easier and easier, and more accurate, speedier, faster so that ultimately it always feels like a one-click checkout.

And in terms of just what I mentioned before, timing and view that you can see some progress tangibly in the next -- some point during 2023, what is your confidence around that?

I'd say that this -- all of these suite of things that we're putting together, we've been preparing it behind the scenes for both, basically our unbranded business, how they can push basically this capability, as well as introduce it to new merchants. I'd say that on schedule, we'd say, hey, we would love to launch a generally available set of capabilities that are around this type of framework next year. And then this year, it's really about piloting and working through all of the kinks around some of these key features to make sure that they're working. And so we have a few pilot customers that we're working very closely to say, "Hey, is it everything that you expected? Is there easier ways to implement it? And then are we getting all the stuff, right?" And then we're being very religious about measuring the performance gains because that's what's going to sell the product.

Do you -- I mean this was a question that we get from clients a lot. Just as you guys are managing your efficiencies and expenses, do you have what it takes? Do you have the resources you need to get this job done in terms of truly doing your job, improving the checkout experience and the experience of merchants?

I'd say that we have most of it, but we do need new talent. And I'll tell you where the areas are that we're really exploring and where we need to invest further is that PayPal has such incredible data, but the data is actually not in product form. And what I mean by that is that if you start to think about questions of, hey, what do you know about, let's say, a consumer? It's just an example. And then what would the consumer give you permission to use? Well, that has to all be organized in a way that it's super straightforward, where the user can actually see it themselves and they can give permissioning in real time. And so is that set up? Not yet, but you see the promise of it, which is this could be incredible. Then you start to look at the merchant side, you have basically the same question, which is what is all the data that we know about the merchant? And then what does the merchant actually want to share with the consumers? And then what is that relationship look like? That's the work. And when you start to say, "Hey, we could put this stuff into a graph," then it's very easy to see, you could drop, basically, machine learning AI on top of it and answer some very interesting questions. And when I say answer interesting questions, all things commerce could be answered through PayPal eventually as you start to productize this data, put AI on top of it and then build experiences that allow basically merchants and consumers to basically interact with our data. So that's where I'd say we don't have the capabilities yet but we have starting to build a vision. We're starting to acquire talent little by little to say, "Hey, we need to architect this solution." And then where we need new talent to actually execute against some of the use cases that we want to drive.

On that note, I mean, I want to talk about different channels because mobile -- PayPal has always had a strong presence on desktop, I think, generally speaking. But there's been more questions as more commerce moves to the mobile front. How do you think about designing product experiences for different channels? And how focused are you on driving just greater app penetration? I'd love to hear just how important it is for PayPal app to driving consumer engagement as well.

Yes. It's critical. By the way, a couple of things to note about this is that when you think about PayPal in the past, it's hard to understand where you would drive consumers to try to engage. So there's no reason to log in the website as an example. You use it as a payment vehicle and then you go to the website, why? You want to update a financial instrument. Well, that's like a utility. It's very rare that you actually have this need on a day-to-day basis. The app really gives us a surface area where you say, hey, we can actually do more for you. We take all this transaction data, provide value-added services. So you will see this year, we will -- the app will start to introduce, one by one, new features that we think are very interesting to help you. One of the themes will be around security, which is, hey, how do we make sure that we keep you safe? How do we make sure that if we know your FIs, that we're also just -- we're doing something for you on your behalf at all times. Something as small as just searching the dark web to say, did we find your credit card? And if we did, how fast can we alert you before anything happens. These are thematically the type of things that we're exploring as opportunities. And then as you say, okay, well, if the app usage is higher, how do you then get better penetration with the merchants. What the merchants want is they want basically PayPal Checkout as a native SDK so that basically they can build native experiences. We're rolling that out...

In mobile form as well?

In -- for the mobile apps, for native apps. And so app developers who are able to then build native experiences with PayPal. And we think that will be especially...

It's kind of necessary and probably game-changing if you can get it done, but is that a -- that's probably a merchant-by-merchant initiative, am I right?

That's right. But a lot of merchants who have apps, if -- think of it in this way, which is, yes, it's merchant by merchant but there's a big head and then a very long tail and that very long tail may not have apps.

Right. All right. So let's talk about -- this brings me to the next question, which is when all is said and done, you complete your task of making this -- these improvements, what are we going to see? What are things going to look like for the consumer, for the user of PayPal, for in-app, in mobile, on desktop? What's the experience should -- what should it feel like?

Well, one thing that we've been rolling out this year, we have it on Venmo, so this is a -- it's actually a very good analogy is that we have this feed, and feeds are really interesting. And Venmo, being one of the few apps with a feed, what they haven't done over the years is that they haven't taken advantage of the main benefit of the feed, which is discovery. And so you start to say, feeds are meant for discovery. PayPal just introduced it. We need to introduce discovery. And so then you might say, what is it that you're helping consumers discover? Well, number one is that we have incredible relationships with small businesses, where we're seeing payment data. We're seeing activity. And so we know that there's probably something incredibly relevant for consumers if we just basically put it into the right forum to say, "Hey, I don't know if you know this, but your contact, your friends or what's trending locally is they're using this dog walker. They're using this accountant. They're using this taco stand." I have a friend Venmo today. She's always eating tacos on Tuesday. I have no idea where she's going. I'm always curious. I ended up texting her. And so then the insight for me is we've got to make this way easier because she's clearly paying somebody, and I would love to see who it is. So I think that you'll see as a theme, the experience will be much more discovery-oriented over time. We're already starting those activities. And then what we want to be able to do is for all of your commerce activities, really give all of the tools like Package Tracking, other things like that, where we feel there will be some value add in regard to, hey, I want to transact using PayPal because of rewards, because of Package Tracking, because of the data value adds that they provide as well as well as security. And so I think that will be the vision that you'll see, and you'll see a lot of those things roll out this year in regard to experiments that we'll be trying to drive to say, "Hey, have we gotten it right in regard to the type of capabilities that consumers want to use?"

Okay. So discovery is obviously helpful. But just on the experience itself, just to be clear, if we want to have a one-click checkout, is that something you see in the horizon?

Yes, absolutely. That's all part of this effort that we have on the merchant side. So as we build that out, it will simplify for the consumer. And then you can easily envision, hey, if you can simplify it that much, could you distribute it back to, let's say, your app. And the answer is yes, of course you can because you've logged in. And so if you're in a logged-in state, all things are possible. And then the question is, what would we make available through that one-click, and that goes back to discovery, which is what is it that we think is relevant. And those are some of the capabilities we would need to build.

And some of that's going to take time by nature of working with merchant by merchant, but I'm assuming there's the 80-20 rule, right?

That's right. And then the world is changing fast, meaning a lot of merchants do have this data in a readily available format. And then the question is, how quickly do you populate all that data with information about relationships as well as what people are buying and the velocity of these things, how fast they're changing.

How about Venmo? It's another area that is clearly something we, investors, but just in general, consumers, love and use. And I think investors, in particular, were hoping for even more, right? More connectivity and interoperability potentially with Venmo with other parts of the business. More utilization of it. Can you just touch on what you see and the opportunity there?

Yes. And you hit upon a lot of those, right, which is consumers are asking us for more capabilities. They've been asking for capabilities around group pay. So that's been a big ask, which is, hey, can you make it easier for me and my friends to split payments and split expenses. Another thing that our consumers have been asking a lot about, well, actually, their teenagers have been asking for, is teen accounts, that's something that they've asked for. And then where I see the big opportunities, 2 things. One is we started this program called business profiles, and we had millions of merchants sign up, millions. And coming in fresh, I actually have no idea why they would sign up because the value proposition, it was unclear to me. When we asked them, why is it that you signed up? Almost all of them say, "I want to be discovered." So that's a pretty big insight, which is, wow, we could use basically the payment flow to drive relevant experiences. We can provide value add. I think that's a big opportunity for us, which is we've got to go explore the space to see what that might look like. The other place where I think that there's just tons of headroom is Pay with Venmo. And the reason why I think that's so massive is that merchants really want it. 2 reasons. One is the demographic, they love it. And so they see this as an easy way to be relevant to a maybe younger demographic that merchants haven't traditionally penetrated. Number two is that it's an audience that doesn't really use credit cards in the ecosystem. It's really about what they have in their balance and trading it. So they see great economics in regard to being able to unlock that. So that part, we know is crystal clear, is that merchants want it. Then the question is for the Venmo consumer, why use Venmo to actually then make payments for the different merchants. And so that will also just be an evolving arena for us in regard to setting up experiments and ensuring that we're building features and incentives, then encourage them to say, "This is actually a very good way to pay." And so...

Just can we make it a little bit more tangible in terms of Pay with Venmo because, again, it's a topic we talked about for years. And so I'd love to hear the tangible realistic potential for that over the course of the next couple of years and what you see. I mean is it something that merchants are embracing as they start to see discovery be valuable? What kind of timeline, if you can give us any sense?

I'd say it's an area of focus for us this year. And what I mean by that is that if you start to think about how -- there's lots of merchant partners that want to use it. The way we've reorganized our business slightly in the past 6 months is that the Pay with Venmo capability used to sit with Payment with Venmo. Now we're sitting at with Pay with PayPal. And the reason why that's a big deal is you need someone to incubate it. But now in order to scale it, the industrial strength where you can hit a lot of merchants, you need the people who've already seen the movie, already worked on it for 15 years and then basically know how to take that and then scale it very, very quickly. And then on the consumer side, you will see a series of experiments this year to say, hey, this is the reason why you want to use Venmo, and it'll be thematic, it will be incentives as well as ideas like Buy Now, Pay Later, which is we think value propositions that really drive basically usage.

And there probably are. I don't know if you've ever disclosed, and don't if you haven't, but there probably are some users of a good number of Venmo users that aren't also PayPal users, right?

That's right. That's right.

And that could be a good amount of white space, I imagine. So I mean when thinking about that, you're spending time, it sounds like, both on the merchant side and the consumer side across the platform.

That's right. I'm spending time on both sides, but I'd say that the side that has the most upside in terms of just getting a good strategy is consumer side. I think on the merchant side, the business is pretty straightforward, which is make a great product, make it incredibly stable, get the latest implementations, push out these products that ultimately we know help the merchants, build out features that help the consumers. It's very straightforward. On the consumer side, because a lot of things that we're talking about, you're not 100% sure if it's going to work. You have to structure it correctly so that they're not wasting time. And so I see a lot of upside there and where they just need maybe a little bit more of my help in the short term.

Some of this discussion has obviously come because over the last few years, we've seen even more progress by competitors, right, whether it's Apple or it's some of the other gateway solutions out there. But maybe help us understand your thought around the checkout or the competitive landscape on Checkout and where you guys feel your position now?

Yes, and I'll speak to it from a merchant side first, and then I'll talk about it from a PayPal perspective, is that from a merchant side perspective, almost everybody fights to add more payment types into checkout. The only people who don't fight for that are the product people, right? And the reason why they don't want to fight for that is that every time you give them another choice, you're declining conversion rate automatically, right? Because now you're just giving somebody a choice and they're like, "Oh, so should I pick a Visa or a Mastercard? Should I pick -- I'll come back tomorrow. I'll decide. I'll do some research."

How interesting.

And they hate that. And then...

You're saying, merchants just hate to have multiple checkout options?

They don't want to do that. They want to figure out, how do I optimize this, make this fast? And then as a secondary thought, they go, "Oh, and then I want to drive down the cost." And so there's always tension in regard to how do you do that by also not leave money on the table. And then almost all product people are incented to get the conversion, right? Get the conversion because that means money as well as margin as well as hitting their objectives in regard to being able to grow their sales. So then you add all of these things, and I'll give an example of some of these alternative payments, Buy Now, Pay Later, at Expedia, when we put some of those players on checkout, the problem is, okay, you've given this option. They say, "Hey, I'm going to go do this $1,600 vacation. I'm making it up. And they say, "I'm going to go down this path." The first obstacle is, oh, you've been rejected, right? So then you go, "Oh, my God. I just spent all this time in it." So then who do they call? They call Expedia. They don't call the alternative payment provider and then they yell at you. And then they say, I hate you. I'm never going to use you again, blah, blah, blah. And so you go, wow, I just can't believe that, that experience was actually created. Okay, well, there's another scenario, which is, okay, you go through the effort, you get approved. It's not at $1,600 though. It's $300. So you said, well, that's useless. Why did you approve me for $300? I want $1,600. And so now, again, it's like they don't know what to do other than to call you and complain and they think that by yelling at you, you'll approve the $1,600, which we don't have the power to do. So as you start to think about those experiences, imagine that's what's happening in those marketplaces. And so for us, example Buy Now, Pay Later has been a home run. But to really make it great, what we really need to do is just preapprove people and we need to tell them exactly the amount. And we should share that with you even before you get to the site. And so if you have this capability, and if you knew, let's say that you had a $1,600 capability to buy a vacation on a travel site, well, then there's all of that tension is gone. And now you're adding value to the merchant. So it's got to be things like that in regard to the alternative payment space. And then I think the reason for this drive for one-click checkout is because the choices are just growing and the merchants don't want to deal with it. They want something to optimize that on behalf of the consumer. And that really needs to be an AI exercise.

Okay. Looking ahead, maybe you could just help us understand your goals for PayPal from your seat over the next couple of years now. I mean you've had the luxury of a whole few months. But nonetheless, based on what you've seen, just what do you want to accomplish over your time when you're -- as you're with the company? And how do you want us to measure your success?

That's a good set of questions. I'd say in terms of my agenda and what we're trying to accomplish is that we're obviously trying to power basically these merchant experiences and these consumer experiences with value add, and we want to make sure that they're adding value to each other. I'd say that the big part of the transformation and why I'm here is I want to help basically PayPal become a tools company to a data and AI company, and all of the things that come with that in regard to optimizing these flows for -- in behalf of the merchant, optimizing the experience for consumers, making sure that our data is in a place where we can help both sides, both sets of consumers and merchants and that we build experiences that we think are quite algorithmic. And then how I measure my success is that I want to see the activity rate for our users grow year-over-year at a very nice rate. That growth selection, make sure that people are using branded checkout. It also means that whatever we're doing in terms of adding value to the consumer through the merchant experience, it's working. And then I hope that what you see in terms of progress is that you'll see that when we talk about PayPal that we're talking about conversion lifts and not off lifts. And we think that's the name of the game. And with our data, we can do it better than anybody else. And so that would be our objective is to build a game-changing product around conversion.

Okay. Thank you very much, John.

Absolutely.

Great to have you with us. It's exciting to see how the things progress, but we really appreciate having you and great to have you meet investors as well.

Thanks so much.