PayPal has reduced its revenue forecast and has predicted a long winter for ecommerce.

The company beat Wall Street estimates with its third quarter results, generating net revenue of $6.85 billion versus the market’s expectation of $6.82 billion. That figure represented an 11 per cent year-over-year increase, while earnings per share increased by 26 per cent to $1.15 (beating an estimate of $0.96).

The company said that the total volume of payments was up by 9 per cent quarter-over-quarter to $337 billion, with Venmo accounting for $63.6 billion of that total.

The company’s share price however immediately tumbled after PayPal’s earnings call, with the company cutting its 2022 adjusted revenue growth outlook from 11% to 10%.

The Dan Schulman-led company also painted a bleak picture of the coming months for consumer spending, with decades-high inflation massively impacting the purchasing power of consumers. The company said that lower- and middle-income households have already begun reducing non-essential spending due to increasing prices of food, energy and fuel.

Speaking on PayPal’s earnings call, Schulman said: "Given a challenging macro environment, slowing e-commerce trends and an unpredictable holiday shopping season, we are being appropriately prudent in our Q4 revenue guide.”

Investment bank KBW subsequently slashed PayPal’s target price from $115 to $95, while at least 11 other brokerages including J.P. Morgan and Jefferies also lowered their price targets.

Elsewhere, PayPal has quietly re-introduced a $2,500 'misinformation' fine less than a month after backpedalling on the controversial measure. The company had previously updated its Terms of Service to include the ability to fine users for “sending, posting, or publication” of any “messages, content, or materials” that are “harmful, obscene, harassing, or objectionable.”

The new policy was abandoned not long after its introduction, but it has now reappeared to include more specific wording detailed below:

PayPal restricted and prohibited activities
- The promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime
- Items that are considered obscene
- Certain sexually oriented materials or services
- Act in a manner that is defamatory, trade libellous, threatening or harassing
- Provide false, inaccurate or misleading information

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