NEW YORK CITY, New York: PayPal, once the dominant name in online checkout, is facing mounting pressure from rivals as competition reshapes the digital payments industry and slows growth in its core business.

The company, which helped pioneer online payments nearly three decades ago, is struggling to maintain its position as competitors, including Apple, Shopify, Klarna, Affirm, Cash App, and Zelle, steadily gain ground.

PayPal's branded checkout business has historically been its most profitable segment. grew just 2 percent in the first quarter, raising concerns among investors about the company's ability to keep pace in one of the world's fastest-growing industries.

The weak growth contributed to an almost 8 percent drop in PayPal shares after earnings were released. The stock has fallen nearly 40 percent over the past 12 months and is down roughly 80 percent from its peak five years ago during the pandemic-driven online shopping boom.

Investor concerns are less about profitability and more about whether PayPal can regain momentum amid intensifying competition.

The company acknowledged in its earnings report that discretionary spending and slower European business weighed on results. It also warned investors that profits in 2026 would decline compared with the previous year.

The slowdown has already triggered major leadership changes. PayPal's board removed CEO Alex Chriss in February and replaced him with Enrique Lores, the former chief executive of HP Inc. and a PayPal board member.

Lores has introduced a cost-cutting plan that includes reorganizing the company into three divisions and expanding the use of artificial intelligence.

He told investors during May's shareholder meeting that he expected to provide further details on PayPal's turnaround strategy "in a few months."

Analysts say Apple has become PayPal's biggest competitive threat.

Since launching Apple Pay in 2014, Apple has steadily expanded its payments ecosystem by allowing users to store virtual cards on devices and make purchases online or in stores through tap-to-pay technology.

That convenience has weakened the importance of PayPal's checkout button on merchant websites, analysts said, as customers increasingly prefer paying directly through their smartphones using fingerprints or facial recognition.

According to UBS analysts, PayPal controlled about nine percent of global and U.S. e-commerce payments in 2019, while Apple Pay held roughly three percent. Six years later, Apple has overtaken PayPal as the leading checkout option and is expected to continue expanding as Apple Pay rolls out to non-iOS users.

PayPal is also facing pressure from buy-now, pay-later providers such as Klarna and Affirm. Although PayPal now offers installment products including pay-in-four plans and longer-term financing, analysts say it still trails rivals in the sector.

"PayPal has had a lot of trouble evolving from being just a way to pay on your desktop computer," said Sanjay Sakhrani, an analyst at investment bank Keefe Bruyette & Woods.

Some Wall Street analysts have speculated that PayPal could eventually spin off businesses such as Venmo or Braintree as part of a broader restructuring effort.

Earlier this year, PayPal shares briefly rose following unconfirmed reports that payments company Stripe was interested in acquiring all or parts of the business.