Enrique Lores Takes the Helm at PayPal With a Mandate to Move Fast
PayPal’s board chairman Enrique Lores surprised Wall Street yesterday (Feb. 3) by appointing himself as the payment giant’s new CEO, replacing Alex Chriss. Lores, who was CEO of HP right up until the announcement, will officially assume his new role on March 1. HP’s board, largely blindsided by Lores’ move to PayPal, scrambled to appoint company director Bruce Broussard as interim CEO and begin a search for Lores’ more permanent successor.
A board chairman taking over the CEO job himself usually signals a lack of suitable candidates. PayPal’s board had considered a handful of internal and external options to replace Chriss, but ultimately didn’t find the right person, per Semafor’s reporting. Today’s digital payments industry is dominated by founder-CEO types like Block’s Jack Dorsey, Stripe’s Patrick Collison, Klarna’s Sebastian Siemiatkowski and Affirm’s Max Levchin—who is also a co-founder of PayPal.
That means Lores, who has little experience in digital payments and fintech, is entering a field packed with more seasoned rivals and has a lot to prove. In yesterday’s announcement, PayPal candidly said the decision to replace Chriss was because “the pace of change and execution was not in line with the Board’s expectations.” Lores promises a faster turnaround and more aggressive innovation, without sacrificing the stability expected of a public company.
“We will further strengthen the culture of innovation necessary to deliver long-term transformation and balance this with near-term delivery, executing with greater speed and precision, and holding ourselves accountable for consistent delivery quarter on quarter, to further assert PayPal’s industry leadership position,” he said in a statement.
Investors are clearly skeptical. PayPal shares have plunged 20 percent since the leadership announcement. “I don’t know Enrique. And he might be a great leader, but on paper at least, he’s a hardware executive. For a payments company,” David Marcus, who served as PayPal’s CEO from 2012 to 2014, said in an X post in reaction to the news.
Lores’ playbook in a changed market
The market PayPal operates in today is far more complicated than the one it conquered a decade ago. Digital payments have evolved beyond a simple pay button on a checkout page. That segment, which PayPal calls “branded checkout,” is now dominated by Apple Pay and Google Wallet.
In the enterprise sector, PayPal faces stiff competition from Stripe and Block’s Square. In peer-to-peer payments, it’s under pressure from Zelle and Block’s Cash App, though one bright spot there is its ownership of Venmo, which it acquired in 2013.
On top of that, newer payment trends like “Buy Now, Pay Later” (BNPL) add another layer of complexity. PayPal launched its own BNPL product, “Pay in 4,” in 2020 amid the pandemic-driven consumer boom. But it has yet to prove itself as a serious player in a post-COVID world and a meaningful rival to Klarna and Affirm.
Lores’ playbook includes fixing PayPal’s “branded checkout” business and pivoting the company into the A.I. era through an initiative called “AgenTek Commerce.” Specifically, Lores plans to push Face ID and fingerprint authentication to nearly half of PayPal’s active users by the end of this year, interim CEO Jamie Miller said during yesterday’s earnings call. That’s a direct attempt to match the one-touch speed of Apple Pay. Miller also said PayPal is building a “universally trusted catalog” that A.I. agents can browse and purchase from on behalf of consumers.
As Lores steps into the CEO role, PayPal’s new board chairman is David Dorman, the former CEO of AT&T. The company’s nine-person board includes a mix of technology, finance and consumer leaders, including Microsoft executive Joy Chik, former EY CEO Carmine Di Sibio, former Warner Bros. CEO Ann Sarnoff and Estée Lauder Companies general counsel Deirdre Stanley, among others.
Dorman praised Lores’ reputation for “customer-centric innovation” in a statement yesterday. “His strong track record leading complex transformations and disciplined execution on a global basis will ensure PayPal maintains its leadership of the dynamic payments industry now and into the future.”