Hello TWIF UK & Europe friends,

Last week PayPal’s CEO Alex Chriss was ousted after two and a half years in the role. Much has been written in the past week about this, perhaps most insightfully by ex-PayPal CEO David Marcus, who highlighted that PayPal spent the past decade optimising for “payment volume instead of margin and differentiation”. 

In the past ten years unbranded checkout has roughly doubled its share of PayPal’s total processed volume, whereas branded checkout has roughly halved — today making up around 30% of PayPal’s volume. 

This is important as branded checkout means PayPal front and centre, higher margins, and more relevant merchant data insights. With unbranded checkout PayPal sits in the background, as the infrastructure for payment processing, and achieves much lower margin.

Part of the challenge for PayPal was knowing which direction to go. 

It’s a consumer wallet, a merchant acceptance play (both branded and unbranded), and has added crypto and lending in recent years. Unbranded checkout was in competition to companies such as Adyen and Stripe, whereas branded checkout was a distinct offering that would, in most cases, garner a minority share of wallet.

The other challenge was the low interest rate environment that followed the Global Financial Crisis, which saw investors mainly value growth and scale above all else. As interest rates rose, that valuation paradigm broke down and PayPal’s share price took a severe hit, as the chart below shows.

PayPal were not the only ones affected. Other fintech companies were also hit as expectations around growth and earnings multiples changed. Affirm’s share price dropped even more than PayPal’s did, but has since recovered multifold from its lows.

Block saw a similar share price slump to PayPal and has since struggled. In recent days the company announced plans to cut 10% of its global workforce. Markets have responded positively, yet Block has some of the same challenges as PayPal — a mix of consumer facing and merchant facing businesses — albeit with a slightly more favourable narrative.

In Europe, Germany specifically has long been a strong market for PayPal. It's the most popular e-commerce payment method in the country — ahead of card payments. Last year PayPal launched in-store payments in Germany, which operates on the Mastercard network, and uses PayPal’s own contactless capability rather than Apple Pay or Google Pay.

Although the launch was a successful demonstration of PayPal moving in-store, it’s an example of growing volumes on card rails, meaning lower margin than transactions on PayPal’s own network. In the past PayPal tried to launch in-person payment via QR codes but this struggled in Western markets. As David Marcus pointed out, partnering with the card schemes means more volume but lower margin. 

Additionally, overall growth in Germany is stalling due to “macroeconomic softness, normalization of our long-standing market leadership position, and competition from alternative payment methods” — PayPal’s own words from a recent earnings call.

The question for PayPal's new CEO, ex-HP chief Enrique Lores, is whether the company can convince the market of its focus, and that its future is a brighter one.

Note: A couple of weeks back I mentioned that Open Banking payments lack the ability to block gambling payments in the same way that cards can. TrueLayer has since clarified that Open Banking can support gambling blocks when banks implement the necessary API signals to detect and prevent those payments.

However, this functionality must be implemented by each bank. Monzo has this in place, but it’s unclear how widely this has been adopted by others.

Please find another week of fintech news, financings and exits below!

• Matt Jones

👍 👎 Have feedback or news to share? Let me know on Twitter and LinkedIn.

Funding 💸

Highlights below of deals since the last post in the fintech space across the UK & Europe. Deal data powered by Dealroom.

Duna announced a €30m Series A round led by CapitalG, Alphabet’s independent growth fund — existing investors Index Ventures and Puzzle Ventures also participated 

FX-hedging platform Bound raised a $24.5m Series A funding round, led by AlbionVC

Incard secured £10m to build a financial operating system for digital entrepreneurs — the Series A round was led by Smartfin, with Founders Capital, MountFund and angel investors also joining the round 

Compliance startup Bits Technology raised a €12m Series A funding round led by Alstin Capital, with Cherry Ventures, Unusual Ventures, Alliance Ventures, and Haval van Drumpt, CEO of Tre Sweden also participating  

Payment orchestration platform Apexx Global raised $10m from Finch Capital 

Investment platform Pluto.Markets secured a $6m seed funding round led by Seed Capital and joined by founders from Pleo, Flatpay, Zendesk and other successful startups

Challenger Banking and Money Management 🚀

🇬🇧 AI money-manager Cleo relaunched in the UK market

🇬🇧 Chase has moved into the insurance market offering travel, mobile and car breakdown cover

Digital Assets ₿

🇪🇺 The ECB warned that delays in launching a Digital Euro could leave Europe vulnerable

🇪🇺 BBVA joined a bank-backed Euro stablecoin joint venture — existing members of the consortium include BNP Paribas, Danske Bank and UniCredit

🇬🇧 🇪🇺 🌍 Crypto exchange Gemini exited the UK, EU, and Australian markets and cut 25% of its staff

🌍 Issuer of the world’s largest stablecoin Tether, aided Turkey in a crack down, freezing more than half a billion dollars of funds

🌍 Tether bought a $150m stake in Gold.com to boost its tokenised gold offering

🌍 China tightened its stance on crypto, reiterating that crypto-related activity remains illegal in the mainland, expanding enforcement to real-world asset tokenisation, and also offshore stablecoins linked to the yuan  

🌍  South Korea’s Bithumb accidentally sent $40 billion worth of bitcoins to users! The vast majority of which they have since recovered 

Payments 💰

🌍 Visa launched a software development kit (SDK) to enable Tap to Pay on iPhone as part of the Visa Acceptance Platform

🌍 PayPal named Enrique Lores as its new CEO following the departure of Alex Chriss

Regulatory Corner 🔎

🇬🇧 The Payment Systems Regulator (PSR) reported that Authorised push payments (APP) fraud increased by 12% in 2025

🇬🇧 The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) announced the first cohort of the Scale Up unit for high growth firms — the companies included are Allica Bank, ClearBank, Monument Bank, Nottingham Building Society, OakNorth Bank, and Zopa Bank

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Longer Reads 📜

AIs are highly inconsistent when recommending brands or products - SparkToro

Europe begins its slow retreat from US dependence - Politico

How geopolitics shapes fintech - Payments Culture

Meet the fintech worth more than Revolut (Nubank) - Financial Times

The juice, the squeeze and the digital euro - Financial Times