E-commerce

PayPal hires Intuit veteran with small business expertise to be next CEO

Digital payments giant PayPal Holdings on Monday named Alex Chriss, a top executive at tax-preparation software firm Intuit, its next CEO as it looks to grab a bigger share of the payments market for small businesses.

Chriss, who has a strong track record in dealmaking, will replace Dan Schulman next month. Schulman will remain on PayPal’s board until the next annual meeting of stockholders in May.

Shares of the company ended 2.8 per cent higher at $63.27 on Monday. Meanwhile, in a late filing, activist investor Elliott disclosed it had dissolved its stake in PayPal.

It is a key moment for the digital payments giant that will be helmed by a new chief for the first time since it split from e-commerce firm eBay in 2015, with analysts noting his appointment could signal an increased focus on M&A.

“We believe (Chriss’s) experience sounds highly relevant to PayPal as it reemphasizes focus on small merchants and launches PayPal Complete Payments,” William Blair analysts wrote in a note.

PayPal Complete Payments is a payments processing solution for small and medium-sized businesses.

According to Wolfe Research, the biggest accomplishment of Chriss at Intuit was the company’s $12-billion acquisition and integration of Mailchimp in 2021.

He has been with Intuit for around two decades and is currently executive vice president and general manager of its Small Business and Self-Employed Group.

“We see this (appointment) as a key positive, given a main concern from investors about PayPal is the company’s lackluster record with acquiring and integrating assets in recent years,” Wolfe Research analyst Darrin Peller said.

No “dramatic” changes

Weak margins at PayPal have brought cost-cutting measures to the forefront of conversations among investors, and analysts are also worried about the competition in the buy now, pay later (BNPL) space from technology goliath Apple.

To gain an edge over rivals, PayPal has been exploring several avenues lately. Last week, it launched a US dollar stablecoin, becoming the first major financial technology firm to embrace digital currencies for payments and transfers.

Chriss’s appointment may have generated excitement about PayPal’s M&A ambitions, but the issue of underwhelming margin at the San Jose, California-based company is expected to be a dampener.

“We don’t expect dramatic changes after Chriss takes over. We believe it would be very difficult to veer from the company’s current focus on improving margins and returning capital to shareholders, given the involvement of activist investor Elliott Management,” Morningstar analyst Brett Horn said.

Elliott in August last year disclosed its stake in the company. While the companies did not spar publicly, analysts have said that PayPal’s focus on improving margins was likely a result of pressure from Elliott.

• Reporting by Niket Nishant in Bengaluru; Editing by Pooja Desai and Shinjini Ganguli, of Reuters.