PayPal Holdings Inc (NASDAQ:PYPL) closed 4.5 million accounts and lowered its forecast for new customers after finding "bad actors" were exploiting its incentives and rewards programs, Bloomberg reports.
- PayPal no longer expects to achieve 750 million active accounts by 2025, abandoning a goal that contributed to a jump in spending last year on sales campaigns.
- PayPal admitted low-income customers were spending less due to rising prices amid the highest levels of U.S. inflation in decades.
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- Growth in e-commerce spending also slowed as supply-chain disruptions affected shipping times and consumers did more shopping in stores during the holiday season.
- PayPal began offering its first-ever sign-up incentives in 2020, handing out as much as $10 to encourage new customers to open an account.
- However, PayPal's risk-management team discovered that bot farms created many accounts.
- Bot farms refer to systems fraudsters use to manipulate internet activity.
- Price Action: PYPL shares traded lower by 26% at $131.17 on the last check Wednesday.
