'Interesting tightrope to be on': PayPal's credit chief balances coronavirus threat against healthy consumer demand
- PayPal is balancing robust consumer confidence against the mounting coronavirus threat.
- "You have the strongest consumer we've ever known," PayPal's global credit chief, Darrell Esch, said at a conference this week. "Then on the other hand, you've got this pandemic risk."
- Wage growth and low unemployment have fueled consumer demand, but coronavirus fears caused the S&P 500 to suffer its fastest correction since the Great Depression last week.
- "It is an interesting tightrope to be on right now," Esch said.
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PayPal is balancing healthy consumer demand against the growing coronavirus threat, Darrell Esch, the payments titan's global credit boss, said at a conference this week.
"You have the strongest consumer we've ever known," Esch told the KBW Cards, Payments & Financial Technology Symposium. The high US savings rate, low unemployment, and solid wage growth have translated into record payment rates, he continued. "Then on the other hand, you've got this pandemic risk."
"It is an interesting tightrope to be on right now," Esch added. "It's really weird to see how strong the consumer is and how volatile everything still is."
Coronavirus - which causes a flu-like disease called COVID-19 - has infected more than 95,000 people, killed nearly 3,300, and spread to upwards of 80 countries. It has disrupted international supply chains, hammered consumer demand, and interfered with businesses around the world.
As a result, the epidemic could halve global growth this year. Fear of the economic fallout sparked a massive stock-market sell-off last week. The benchmark S&P 500 tumbled 13%, notching its biggest weekly loss since the 2008 financial crisis and its swiftest correction since the Great Depression.
PayPal's business remains stable, Esch said. However, coronavirus now threatens to sap its recent momentum.
The group's revenue, net income, and operating margin all hit record levels in 2019, as total active accounts grew 14% to 305 million and total payment volumes surged by roughly a quarter to north of $700 billion.
