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 Document 2211 North First Street San Jose, CA 95131 paypal.com                                              May 16, 2025 Via EDGAR Division of Corporation Finance Office of Trade & Services Securities and Exchange Commission 100 F Street, N.E. Washington D.C. 20549 Attention:    Ms. Amy Geddes               Re:      PayPal Holdings, Inc. Form 10-K for Fiscal Year Ended December 31, 2024 Filed February 4, 2025 File No. 001-36859 Dear Ms. Geddes: Thank you for your letter dated May 5, 2025 addressed to PayPal Holdings, Inc. (the “Company”) setting forth comments of the staff (the “Staff”) of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the “Commission”) on the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”). To facilitate the Staff’s review, we have keyed our responses to the headings and numbered comments used in the Staff’s comment letter, which are reproduced in italics below. Our responses follow each comment. Form 10-K for the Fiscal Year Ended December 31, 2024 Notes to Consolidated Financial Statements Note 2 – Revenue Disaggregation of Revenue, page 76 1. We note you disaggregate revenue by geography, as required by the entity-wide disclosures under ASC 280-10-50-41a, and by "revenue category," consisting of "transaction revenues" (91% of revenue for 2024) and "revenue from other value added services" (9% of revenue for 2024). With respect to the disclosure requirements of ASC 606-10-50-5, please tell us how you considered the guidance in paragraphs ASC 606-10-55-89 through 55-91 in selecting the appropriate categories to use to disaggregate revenue. In this regard, we note factors such as: • various references to and disclosure focused on your two customer types - consumers and merchants - in your filing; • you have general managers for various lines of business, such as "Consumer Group," "Large Enterprise," "Small Business & Financial Services," and "Global Markets" (per your February 2025 investor day presentations); • you present total payment volume metrics to investors for various products, such as "PayPal branded checkout," "PSP," and "Venmo" in your quarterly earnings presentations; and • your remittance business, Xoom, had stagnated and been on a negative revenue trajectory, and various other comments about contributions from various business lines to your growth (per your Q1 2024 earnings call). Company response: PayPal disaggregates revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. While ASC 606 provides examples, an entity’s revenue disaggregation disclosure is based on relevant facts and circumstances and requires significant judgment. Our determination of the appropriate revenue categories for PayPal considered how information about revenues has been presented for other purposes, including earnings releases, annual and quarterly reports, investor presentations and information regularly reviewed by the chief operating decision maker. Based on our evaluation of the factors in ASC 606-10-50-5 and 55-89 through 55-91, we determined that disaggregation based on geography and disaggregation based on type of good or service, specifically transaction revenues and revenues from other value added services, were the most relevant. Geographical Region PayPal provides geographical revenue totals disaggregated by U.S. revenues, which is one of PayPal’s most important markets, and the revenues of all other countries. This information is provided as different geographies may be impacted by different economic factors associated with the uncertainty of revenues and cash flows. Geographic disaggregation is also important to us from a strategy and business opportunity perspective as we continue to grow domestically and in international markets by expanding our products and services both offline and online. Additionally, this presentation was determined to be appropriate primarily because no individual country outside of the United States generated 10% or more of total net revenues for the periods presented. Type of Good or Service We disaggregate revenues between two types of revenue categories: transaction revenues and revenues from other value added services. Revenues recorded within each of these categories are earned from similar products and services for which the nature of associated fees and the related revenue recognition models are substantially similar. Transaction revenues are earned through transactions on our payments platform. While we offer a wide range of products on our payments platform to meet the diverse needs of our customers, the nature of each product offering is transaction processing. The revenues earned from processing transactions on our payments platform are recorded within transaction revenues and share substantially similar characteristics. For example, transaction revenue is earned from contracts with customers that are defined at the transaction level and do not extend beyond the service already provided. Revenue within this category arises from a single performance obligation, which is satisfied at the point in time a transaction is completed on our platform. The uncertainty of revenue and cash flows do not significantly differ between our products within transaction revenue and is generally more dependent on geographic region. Revenue from other value added services are revenues that are not earned through processing transactions on our payments platform. Net revenues derived primarily from revenue earned through partnerships, referral fees, subscription fees, gateway fees, and other services we provide to our consumers and merchants. We also earn revenues from interest and fees earned on our portfolio of loans receivable, and interest earned on certain assets underlying customer balances. These revenues from contracts with customers are generally recognized over the term of each contract as opposed to being recognized at a point in time. A significant portion of revenues from other value added services is generated from interest and fees earned on our credit products, the revenue share we earn from the credit products of our partners, and interest earned on customer balances for which the uncertainty of revenue and future cash flows are significantly influenced by changes in interest rates. In determining the categories, we considered the examples found in ASC 606-10-55-91: a) Type of good or service We believe that the type of services PayPal provides its customers are best categorized through transaction revenues and revenues from other value added services. Revenues recorded within these categories may be earned from different products, but the nature of the associated product offerings and the related revenue recognition models are substantially similar within each category. We have considered how information about revenues is presented outside of our financial statements such as our presentation of payment volume metrics and performance of certain products discussed in various periods. We measure the scale of our platform and the relevance of our products and services to our customers through certain metrics, including Total Payment Volume (“TPV”), which is defined as the value of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions. TPV does not directly relate to transaction revenues as TPV includes payment transactions processed on our payments platform that do not earn revenue. For example, certain activities such as sending person-to-person (“P2P”) payments are generally offered as a free service to our PayPal and Venmo users. P2P is an important source of customer engagement and also serves as a customer acquisition channel that facilitates organic growth by enabling potential users to establish active accounts with PayPal or Venmo at the time they make or receive a P2P payment. Conversely, certain transactions on our payments platform such as currency conversion, the instant transfer of funds for our customers from their PayPal or Venmo account to their bank account or debit card, the purchase and sale of cryptocurrencies, and other miscellaneous fees do not generate TPV but generate revenue that is recorded within transaction revenues. TPV provides investors with an understanding of the scale of volumes and insight into PayPal’s market share, rather than the level at which revenue and cash flows are affected by economic factors. TPV is presented by product (e.g., branded checkout, payment service provider (PSP), etc.) to measure the scale of our platform and the relevance of our products and services to our customers; however, all such transaction processing products share substantially the same nature, timing of revenue recognition, uncertainty of future cash flows, and contract structure. Additionally, we may disclose supplemental information regarding the performance of certain products, such as revenue growth rates, to provide investors with insight into how consolidated revenue was impacted for a given period, to highlight current trends affecting overall company performance, and to provide how our new management team's strategy and prioritization is impacting the company performance. During our Investor Day event in February 2025, we highlighted our strategic imperatives to drive focused execution and realize our vision of accelerating profitable growth by 2027. The presentation of these product-level growth metrics and strategic imperatives is not intended to imply that the associated products carry materially different risks from our disaggregated revenue categories, or that they differ significantly in terms of nature, amount, timing or uncertainty of revenues and cash flows. Our product offerings within our disaggregated revenue categories broadly share similar characteristics and are similarly impacted by macroeconomic factors. We may provide information about directional revenue trends or revenue growth for a specific product (e.g., the Xoom negative revenue trend in Q1 2024) from time to time when useful to explain consolidated results. However, this information is not provided for all products on a consistent basis, nor do we provide detailed revenue amounts by product. Additionally, such information is limited to relative indicators such as directional revenue trends or revenue growth percentages rather than total revenue amounts. b) Geographical region As discussed above, geographical region is used to disaggregate our revenues. c) Market or type of customer We operate a two-sided payments platform that connects merchants and consumers. Beginning in late 2023, we evolved our organizational structure and established three business units (i.e., Consumer Group, Small Business & Financial Services and Large Enterprise) to more closely align to the customers we serve and to help enable our teams to deliver more seamless and differentiated end-to-end experiences. Operating as a dual-sided network involves strategic, interconnected business decisions focused on both sides of the platform, and strategies aimed at our consumer business generally impact our merchant business and vice versa. Our merchant business units share common products that we offer across our payments platform. Global Markets is a central function focused on our ability to serve local market needs in different geographical regions. We earn transaction revenues primarily from fees paid by our customers to receive payments on our payments platform. In a typical transaction only the merchant (party receiving funds) pays a fee, and the standard payment flow is free for consumers. Accordingly, the majority of PayPal’s transaction revenue is derived from merchant accounts, but purchases are primarily initiated by consumer activity. To drive overall payment transactions and merchant revenues, we may offer products at no cost to consumers or incentives that reduce consumer revenues to accelerate the flywheel effect. Business decisions that benefit the entire company will often distort revenues at the customer level and results must be reviewed at the total consolidated level to be understood. For example, credit products (e.g., Buy Now Pay Later, Merchant financing products, etc.) give consumers and merchants an additional reason to use PayPal, driving increased customer engagement and facilitating the flywheel effect across our platform. Consumer credit products provide additional flexibility and are cost-efficient funding sources, while merchant financing increases our engagement with merchants and incentivizes them to use PayPal’s products more broadly. While we have business units with general managers focused on our customers’ needs, due to the interconnected nature of our customer-focused business units, business decisions must be evaluated based on their overall contribution to the company’s consolidated results. Accordingly, our Chief Operating Decision Maker (“CODM”) assesses performance and allocates resources at the consolidated level rather than on the basis of the customer-focused business units. The compensation structure of our general managers is based on company-wide performance determined through consolidated metrics. d) Type of contract We have determined this is not a relevant category for disaggregation as the significant majority of our contracts contain a single performance obligation for which the transaction price is known at the end of each reporting period. e) Contract duration The contract duration of transaction revenues differs from the contract duration of revenues from other value added services. Transaction revenues are generated from contracts that are short-term as each individual transaction is considered a contract. Revenue from contracts with customers within other value added services generally is through a service arrangement that is provided over an agreed upon contractual period that is often long-term. f) Timing of transfer of goods or services The timing of contracts differs for transaction revenues and revenues from other value added services. Transaction revenues are satisfied at a point in time, while other value added services revenues are generally satisfied over time. g) Sales channels We have determined that this is not a relevant category for the purpose of this analysis as our services are typically sold directly to our customers through our payments platform. In summary, we apply the guidance in ASC 606-10-50-5 to 7 and 55-89 to 55-91 by appropriately disaggregating our revenues and do not believe additional disaggregation is necessary. Management reviews disaggregated revenue disclosures and the requirements of ASC 606 on a regular basis. As our business evolves, and, if appropriate or necessary, we will update our financial statement disclosures at such time. Note 13 – Commitments and Contingencies Protection Programs, page 110 2.     W e note your reconciliation of the changes in the allowance for transaction losses and negative customer balances, which you consider to be assurance-type warranties, includes reconciling items "provision," "realized losses," and "recoveries." Please revise your tabular reconciliation to include the reconciling items specified by ASC 460-10-50-8c. Company response: Our protection programs comprise (1) our purchase protection program that protects buyers who did not receive their item from a seller or received the item, but it was not the item they ordered and (2) our seller protection program protecting merchants when buyers claim that the transaction was unauthorized, or they did not receive the item. Our protection program disclosures within Note 13, Commitments and Contingencies, comprise both the allowance for transaction losses and the allowance for