During a discussion about Q4 earnings, PayPal CFO John Rainey revealed that 4.5 million accounts were closed due to “bad actors” exploiting incentives and rewards programs, which resulted in a 25% drop in shares, according to Bloomberg.
On the conference call, PayPal representatives noted that inflation and supply chain issues have contributed to reduced spending by lower-income customers and a rise in in-store shopping. This has led the company to abandon its goal of reaching 750 million active accounts by 2025.
To work towards this target, PayPal began offering $10 incentives for new account openings in 2021. However, the company recently discovered that many of these accounts were registered by bot farms. Rainey commented, “We regularly assess our active account base to ensure the accounts are legitimate.”
He emphasized, “This is particularly important during incentive campaigns that can be targets for bad actors attempting to benefit from these offers without any intention of being legitimate customers on our platform.”