Ex-PayPal President David Marcus Says 'Defensive' BNPL Strategy Handed PYPL's Market Share To Rivals, Leading To Stagnant Growth

Following a 20% collapse in PayPal Holdings Inc.‘s (NASDAQ:PYPL) stock price and the abrupt removal of CEO Alex Chriss, former company president David Marcus has broken a twelve-year silence to critique a culture of “financial optimization” that he claims has hollowed out the payments pioneer.

Legacy Of Optimization

Marcus, who led PayPal until 2014 before moving to Meta Platforms Inc. (NASDAQ:META), attributed the company's current struggles to a long-term shift away from product-led innovation.

In a scathing public assessment, he noted that after his departure, "The leadership style shifted from product-led to financially-led. Over time, product conviction gave way to financial optimization."

According to Marcus, this internal focus on predictability over platform risk caused PayPal to lose its competitive edge just as rivals like Apple Inc.‘s (NASDAQ:AAPL) ‘Apple Pay’ began to dominate the mobile checkout landscape.

"We had executed a silent turnaround of a company that had lost its soul," Marcus said of his tenure, suggesting that the “mojo” he fought to restore has once again evaporated.

BNPL ‘Feature' Fail

The critique was particularly sharp regarding PayPal's handling of Buy Now, Pay Later (BNPL).

While competitors like Klarna Group PLC (NYSE:KLAR) and Affirm Holdings Inc. (NASDAQ:AFRM) built massive consumer brands, Marcus argues PayPal treated the technology as a “defensive checkout feature rather than an offensive category.”

"Others built platforms, PayPal added a feature," Marcus stated. He noted that despite having the merchant relationships and trust required to dominate, the company failed to turn BNPL into a “core consumer relationship.”

This lack of aggression allowed rivals to seize market share, contributing to a quarter where PayPal’s core branded checkout growth slowed to just 1%—a figure management described on Tuesday’s fourth-quarter earnings call as a significant “execution shortfall.”

A Leadership At The Crossroads

The fallout from these strategic misses resulted in a $10 billion wipeout of market cap this week. The board responded by appointing Enrique Lores, former CEO of HP Inc. (NYSE:HPQ) and a long-time board member, to take the helm on March 1.

While the board cited a need for “greater discipline” and “faster execution,” Marcus remains skeptical of the leadership being tapped to save the fintech giant.

Referring to the appointment of Lores, he remarked, "He might be a great leader, but on paper at least, he's a hardware executive. For a payments company."

PYPL Drops Nearly 30% In 2026

So far in 2026, PYPL shares have declined by 28.57% and 37.86% over the last six months. It was also down by 53.41% over the year.

It maintains a weaker price trend over the long, short, and medium terms with a poor quality ranking, as per Benzinga's Edge Stock Rankings.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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