PayPal Wallet Share Drops to 40% While Apple Pay and Shop Pay Gain
Analysts estimate PayPal’s digital wallet share slid from 90% in 2017 to about 40% today as e-commerce rivals gain ground. U.S. branded checkout volumes excluding Venmo rose only low-single digits while Apple Pay and Shop Pay now hold roughly 20% and high-teens shares, pressuring PayPal’s pricing power and gross profit.
1. Market Share Decline
Analysts estimate PayPal’s share of digital wallet checkouts tumbled from about 90% in 2017 to roughly 40% today, driven by slower low-single-digit growth in branded checkout volumes excluding Venmo and reduced desktop purchase traffic.
2. Rivals Gain Ground
Apple Pay now commands around 20% of digital wallet transactions, while Shop Pay has surged into the high teens with roughly $110 billion in volume in 2025 and about 30% annual growth, and buy-now-pay-later providers like Affirm and Klarna have expanded their footprints.
3. Pressure on Profitability
Digital wallets overall are growing about twice as fast as e-commerce, intensifying competition and eroding PayPal’s pricing power, which could weigh on gross profit margins in its core branded checkout business.
4. Value-Enhancing Scenarios
The current stock valuation already reflects these structural headwinds, suggesting potential catalysts such as asset spin-offs or activist involvement to unlock shareholder value if PayPal can stabilize market share and financial performance.