All right, guys, let me kick in. First of all, thank you again for everyone here for joining us at day one of the Wolfe FinTech Forum . Really happy to have the team from PayPal here with us. We have on stage Jamie Miller, who, as many of you know, is the CFO and the COO of the company more recently as well. Jamie, thank you so much for joining us. Really great to have you here.
Happy to be here. Thank you.
I remember I was just saying about a year ago, I think you were really almost, it was probably your first conference, right, as the CFO of PayPal. It is great to have you back with us.
Thank you.
Look, with that in mind, maybe we just kick it off in that way and start off with a little of what you've seen over the past year in terms of what you believe were some of the most exciting milestones from 2024 and maybe how you exited the year. We'll go from there because there's a lot to unpack.
Yeah, no, happy to. Again, thank you for having me here. Yeah, this was my first conference that I did a year ago. You know a lot's changed in the company. You know I've been there 16 months. You know we have pretty much refreshed the company top to bottom in many respects. You know new management team, really refocused last year on getting our operating rhythms in place, really putting a lot of structure in the company. You know I kind of rebuilt the finance team top to bottom. The primary focus for us was inflecting the company to growth and just really establishing that foundation from where we can move forward as a company. I'm really excited because we had our Investor Day a few weeks ago.
I think we are very, very clear in terms of what we need to do and how we're aligned to go execute against it. To me, that's probably the most exciting thing about last year's execution. You know we had a nice year. You saw that in our fourth quarter results too in terms of how we ended the year with positive transaction margin up about 800 basis points over the past couple of years, revenue growth, earnings per share over 20%. It was a nice foundational year for us.
Definitely had a lot of change from where you exited 2023 into 2024 into where we exited and from a trajectory standpoint. What are you most excited about going forward now? I mean, just big picture for a moment. Especially coming off of two weeks, I think it was now, removed from your Investor Day. I mean, you know what are some of the most incremental points and takeaways from that day you want us to make sure we're aware of that leads into what you're most excited about going forward now?
You know I think when we look at PayPal, we see a massive opportunity with our two-sided network and the market positions we have with our products. You know as I mentioned, I'm really excited about the clarity we have around our strategy that as we really lean into consumer and habituate folks around how they work with the PayPal brand, the PayPal app, branded checkout, it really yields in terms of monetization across all the pillars of the company. When you think about Investor Day, to me, the three pillars are winning branded checkout. How do we do that? It's about growing Omnichannel and growing Venmo. It's really around really leaning into processing in a profitable growth sort of way. That's the story we laid out.
I think the other piece of it is that as we've really sort of studied the cohorts and looked at our experience, how self-reinforcing it is around the habituation elements and the growth elements once we get all of those moving in concert.
Tell me more about that. I mean, in terms of making sure investors come away from that Investor Day understanding a couple of key points. The network effect is huge. Having the consumer base you have is obviously something that's probably still, in our view, underappreciated. Really understanding what you can bring that all together as that was the message, right, is what that can look like in terms of both the results on Brand ed and Un branded. What are your hopes for the end of 2025 to see that really shows that the Investor Day message was materializing?
Maybe it helps if I unpack just a little bit those three pillars.
Please.
I can lean into the 2025 side of it. When we think about winning branded checkout, you know that is a really core product for us. It's really important. We have in the past really leaned into the working with our merchants part of it very closely. I think as we've broadened the aperture, you know that is still a really important pillar. You know one of the things we're very focused on is really improving our merchant experience and our conversion uplift and our consumer experience with the app. Driving stronger selection rates, better presentment, and just improving latency and just driving lift in our TPV through making the product better and deeper relationships. The other two pillars, which hadn't been as tightly connected, one is Buy Now Pay Later. You know we're a very significant Buy Now Pay Later company.
It had always been run very separately in the company as opposed to being highly integrated. We have taken a lot of steps in 2024 to really reintegrate that back into the pay flow, get that front and center with our consumers, and have that be a core part of our offering. That should be a significant part of how we move branded checkout, the needle on that over the next couple of years. The last is pay with Venmo. Anybody who knows me knows I get super excited when I talk about the Venmo product because we are just doing so much with it. Pay with Venmo in particular is something that has been great for our merchants, particularly those who are mobile -first. It is also something where we have seen very significant growth.
Those three things together sort of bring you to our three-year outlook on branded checkout. In 2025, you know what we've said and what we expect is that we'll see pretty consistent branded checkout TPV growth this year versus last year. When we look at Omni and Venmo, you know we've really been leaning into the offline experience for our consumers because we really want to habituate around the brand. Offline meaning the debit card penetration, you know how we really lean into rewards and loyalty and other elements of that. On the Venmo side, you know just bringing more features and more also debit penetration. Taking this whole space around PSP, consumer experience, and really moving that needle as well. The last place the PSP piece of it is beginning to really inflect the revenue there.
You know we've made some very intentional decisions in that business and really putting that back on a trajectory of revenue growth in addition to the margin growth that we've been focusing on.
That's a great overview from what you wanted for takeaways from the Investor Day. I appreciate that. Let's just go back to guidance now in terms of your medium term and your outlook overall. I mean, you've talked about right now mid-single digit in terms of where we were, medium in terms of gross transaction margin growth. But you're calling for high single digit transaction margin growth ex-float by 2027 and a long-term ambition of 10% +, obviously. Maybe just walk us through the bridge of how we go from where we are today to that high single then maybe even hypothetically long-term 10%+ if we can get there as well.
Yeah, the bridge to that high single digit is really the framework I just laid out. It is winning in branded checkout. It is deepening penetration in Omni and Venmo monetization. It is the processing growth that we talked about. If you look at all of that, you know we just expect each year to be better than the last in terms of how that progresses and how that shifts over time over that three-year period. When you look at the long-term ambition we put out, you know we felt it was really important not only for our teams, but really for everyone to understand like when we're investing for the future, like we're really thinking about that as our North Star.
We want to come back to our teams, really have them understand when we are investing, when we are executing, and when we're really nurturing some of these longer-term growth vectors that it is not about incrementalism. It is about really leaning into the notions of commerce platform and real growth. Having sort of the medium term coupled with that longer-term ambition, we felt was an important part of keeping that in front of us.
Okay. Jamie, if we go back to fourth quarter for a minute, I mean, branded volumes grew, I think it was 6%. It was about a 50 basis point acceleration. You talked about U.S. had shown almost 300 basis points of acceleration and international, which is about 60% of the business, if I remember correctly, from a branded standpoint, had decelerated about 100 basis points. Maybe just walk us through the varying dynamics for branded from a regional standpoint for a moment and what's macro, what's something you have control over, and what you see the trajectory looking like.
Yeah, so when you look at branded in fourth quarter, 6% TPV growth, the U.S. piece of it, we were really encouraged by. We saw a three-point lift versus third quarter. And you know we have spent a lot of time over the past couple of years diversifying around different sectors. You know we saw nice growth there in travel, in gaming, and in crypto. And when you look at international, you know we have a very, very strong market presence internationally and very strong share profile there. And so when you looked at that, we saw a little bit of shifting, as you mentioned, but still taking share and still very strong growth. When you look at how we're investing in the markets, the U.S., we are there to win.
I mean, the weight of the organization is around how we're investing in product in the U.S., how we're deepening with merchants in the U.S. That is something as a core part of our execution. On the international side, you know it's really around continuing to refresh the product and bring innovation there. All the things we're talking to you about, whether it's Omni and debit or the merchant conversion uplift or the consumer experience, all of those are now going into Europe as well this year. We have nice execution plans around that.
Just taking a step back again, I don't want to stay on branded given how important it is for investors and for the story overall. I mean, you were at, you had accelerated, as you said, three points. Just help us understand the cadence of what U.S. was maybe before that, where it's been trending towards and what you see more recently and opportunities into this year as well from a cadence standpoint.
Yeah. As we've said before, when you look at our 6% growth, I mean, international was growing stronger than that. U.S. was growing less than that. I would say low single digits in the third quarter and then in the fourth quarter, moving up from there. In terms of more recently, branded TPV through February was consistent with what we'd seen. You know, it's obviously a very dynamic environment. You know, we're cautious and we're watching that. You know, we really get back to we're very focused on execution across our strategic initiatives and managing what we can control, which is investing in our product and continuing to drive very strongly.
Internationally, I mean, again, you talked about a couple of markets having just some macro dynamics and maybe there were some other dynamics also. Maybe just explain what you were seeing internationally that drove that mild deceleration last quarter and what you see from a trajectory there also.
Yeah. So you know I mentioned on our fourth quarter call the U.K. and Germany. I would say for different reasons, those markets dipped a bit in the fourth quarter. Again, I would say you know internationally has continued to perform very strongly this year. You know a little bit of noise around the German elections, but that's popped right back. Largely still investing and executing.
Good. When we think of the bigger picture targets, once again, on branded specifically now, you know even just going back to the Investor Day, you expected branded volume growth to accelerate from that 6% level or the mid-single digit level up to, you've said, 8-10% by 2027. And I know there's been building blocks of conversion improvements as well as investments in marketing. Maybe just revisit that again. Number one, just what's the cadence around the investments you're making? Where do you see them actually impacting the volume growth from a branded standpoint? You know the timeline of getting to that 8-10% and what do you see?
Yeah. What we look at is over our three-year outlook, getting to that 8-10%, starting with the 6% base. Just to unpack the merchant experience piece of it a little bit more, we started mid-last year to focus on not only changes to the consumer app experience, improving latency, improving features, improving just how it performs in connection with merchant checkout, but also really focusing on merchant conversion uplift. We have been working over the past six months to really get that rolled out, get that pushed out in the experience. We're probably, as of Investor Day, we were at about 30% U.S. penetration on that. We are continuing to work on that this year. We'll begin to roll that out in the U.K. and in Germany and in parts of Europe in the second quarter.
At the same time, we've done a ton around brand and marketing in the company and really engaging the consumer differently. You saw us come out with our Will Ferrell campaign in September and October. You've seen us come out in different ways with rewards programs and loyalty and cashback. All of that has had a really nice impact on not only our monthly average accounts, but also on selection rate and how just people are engaging with us in a different way. Those kinds of investments are the things you should expect to see more of this year as well, really centered around how we're launching product and around the big buying periods within the year.
When you start to look at some of the other stuff I talked about before around Buy Now Pay Later or around Pay with Venmo, you know Buy Now Pay Later is super interesting because it's been part of PayPal for a long time. Yeah. Michelle Gill came in last year and she's just a very, very deep credit financial services, capital markets leader, and rebuilt the team top to bottom, really evaluated all of the products, you know really rebuilt our risk function. Credit is back to growth in the fourth quarter. If you remember, we're not in the credit business to be in the credit business. We're in the credit business to really enable all of the other parts of our business.
You know, Buy Now Pay Later is one that now with it much more tightly integrated, you know we're moving the needle. We expect that over the next couple of years to have about a 20% CAGR in our growth on Buy Now Pay Later, which really brings against a nice uplift into Branded.
Right. That contributes about a point, right?
It'll contribute about a point. The first winning checkout, the merchant experience piece should be a point or two. Buy Now Pay Later should be about a point of growth over the next couple of years. Then Pay with Venmo, another point.
Okay. That's your three points incremental to the mid-single digit range you're in now.
Yeah.
Okay. That's really helpful clarity. I mean, I guess the conviction you have of going 30% U.S. to 80% globally on that modern checkout is a big deal. It doesn't seem intuitive for investors to understand how you're going to get it done. Just help us understand what goes into that and why you have conviction in that. Because I know it comes with a great conversion uplift to have someone on a single checkout or vaulted checkout.
Yeah. Our conviction really comes from the fact that there's maybe a few pieces of this in terms of how you execute. The first piece is really things that are largely within our control and things that we can do that and push out with merchants or push out with consumers that naturally drive the experience to be better and the conversion uplift to happen. You know, as I mentioned, we're already at 30% penetration within the U.S. Between the U.S. and what we can roll out in Europe, you know there's still a significant amount of execution that is just that. When we start to look at Europe, a lot of our merchants are already on our latest integrations. So the uplift for them, it's not a ton of work. And it's something that we think can come pretty quickly once we move into Europe for execution.
There is also a fair number of merchants here in the U.S. and outside of the U.S. where, you know, we have to get them on the latest integration. We have to do work with them to really get it integrated into their checkout flow. You know, we are in the market talking to merchants now about lining that up. You know, you mentioned the conversion uplift being super exciting. It is really compelling. We are seeing at least 100 basis points of conversion uplift, in some cases, 300-400 basis points of conversion uplift. It is very compelling for folks to do the work. We have to get it in the queue now so that we either hit it before the holiday season or we are ready in 2026 to really get that going into the 2026 holiday season as well.
We've got about a two and a half year period here. And we're just very organized around how we're going after it. I expect you're going to see acceleration, some plateauing while we really do some of the heavy lifting, and then more acceleration.
Okay. Shifting to the consumer engagement side for a moment. Obviously, the checkout experience we spend a lot of time talking about right now going to 80%. We still, and I think I even asked this at your Investor Day, we still want to see kind of the fire ignited again under the consumer to want to use some of these great products you have. I have said this before. I mean, I think it is still under appreciation that you have 230 million monthly active users that you have data on that are engaged with you on a monthly basis. It should be very doable to get them more and more engaged from the, what is it, roughly 34 times or so per year now.
Maybe help us revisit again, whether it's loyalty or what you're expecting from a marketing campaign standpoint from going forward that will help really drive that incremental engagement.
Yeah. For us, it's multipronged. I'll first start with, you know, we had to reinvigorate the brand this year. That's why when we really hit the market with our Will Ferrell campaign and really looked at top of the funnel, really bringing that brand energy and the awareness back, we wanted to energize the brand. That was a piece of it. You'll continue to see that. When you get down to how do consumers engage, there's the experience of the app itself and the ease of use, the contact syncing, some of those kinds of features, which we have really spent a lot of time on improving the app. It also gets to how do you reward people for being there.
You know, we rolled out a campaign in the fall around not only debit card penetration, but also 5% cashback on debit card transactions. We are also doing a lot of co-marketing, if you will, with our merchants where we are having merchant offers embedded in the app and the ability to stack those things and have them all together collectively give a lot of money back to consumers. It is a number of different ways, but it is about helping people not only be there, but stay there, but then get rewarded as they do. What we found is we have grown our debit penetration by over 1 million users in the fourth quarter.
In addition to that, what we're seeing with the debit habituation is a really nice halo effect into branded, where we're seeing about a 20% lift with those debit users back into the branded product, which is awesome as well. You know, we don't want them keeping their money where we want them, the transactions flowing through all of the products we have.
Right. So then what do we expect for this year? I mean, another big marketing campaign like a Will Ferrell campaign again at some point this year, similar? I mean, it's not one and done, I guess is my question.
It's certainly not one and done. They're working on that right now. It's awesome. I just saw our Chief Marketing Officer in the hallway this morning, and he's very excited about it. It will be, we are going to spend time on brand. We have to continue to bring that back to the energy level it deserves. We're also moving more deeply into more of the mid-level and lower funnel marketing and really looking at strong paybacks there. In terms of how we do it, it'll be through partnerships. It'll be through ads and offers. It'll be through just different ways of engaging the consumer.
Right. A little more of a balance, I guess. You have all the data on the consumer to really be more targeted if you want to be, right? We have a few hundred basis points from a combination of Buy Now Pay Later and Pay with Venmo and conversion checkout and marketing behind all that. Again, this takes time, right? Our expectation is still mid-single digits for this year, maybe some a little bit of evidence of this as the year progresses. I do not know if you give us a sense of what the cadence was for this year. I think it was more just mid-single digits, right?
For branded?
Yeah.
Yeah, yeah, yeah, for branded. We said consistent with last year. And certainly, you know, as we look at it, as we execute, you know, we expect to see the ramp over the three-year period. Should we see inflection later this year as we go into next year?
Got it. Very helpful. All right. Let's shift to Braintree and just generally what you've done there. I mean, it's been a big transformation, obviously, from what was really a much lower cost opportunity for some customers to hopefully cross-sell. I think you've really pivoted back to being really just make sure it's a profitable business, right? Just talk to us a little more about the price to value motion the last few quarters and really just on Branded now contributing to transaction margin dollars and the growth rate of it. What does the forward trajectory look like for that initiative now? Maybe we'll start there and go a little more into it.
Yeah. One of the first things we did when we came in a year ago is really study this business around number one, our mission was to really pivot to profitable growth. We also really wanted to understand exactly how we were hitting the market. We tore the business apart top to bottom and really looked at sort of our merchant value prop, our products, our services, what our performance levels were, and really understood kind of what did our margin profile look like relative to our peers in the market. As we did all that, what we found is we have a very strong merchant value prop. Our performance levels are excellent, world-class.
The question really came back to, okay, if all that stuff is true, why aren't we taking more of our seat at the table in terms of how we put product around it, how we work with our partners to really drive a much more holistic value prop around it. That is what we set out to do last year. We have got a really rich cross-section of big accounts we work with in Braintree, from mega merchants to thousands of large enterprises, and really set out to look at the contracts where we just really were not feeling like we were where we should be, not only for us, but for them in terms of servicing them.
Either as they've come up for renewal or in some cases before they've come up for renewal, started a process of opening them up, opening up the conversation and getting back to how can we be more strategic together. That involves core pricing. It involves deciding which services are win-wins for both of us and which ones may not be. It also gets back to value-added services and building out a much more complete portfolio of that. It's really funny too, because when you look at core operations, there's a lot of fees and prices that flow through these kinds of businesses. The other thing we found is we're just not passing through price or doing some parts of the core daily blocking and tackling the business that everybody else does that we should be doing too.
There is a whole range of things we are tackling here. What I am really excited about is we have a new leader in Braintree, came in about six months ago. He is tackling this and he is on fire about it and just really has the full vision. He has done a very nice job of table setting with our strategic merchants and repositioning and just setting the business up for the future. We get a lot of questions around how do you think about repeatability of growth. Is this one time because you are opening up a contract. That is what I love about it the most, he is building the business.
That's great.
We did in the second quarter see the first quarter of Braintree contribution to TM growth that we'd seen in a while. We've seen that since every quarter. We expect nice trajectory over the next three years.
Yeah. I was going to ask you about that because it's sort of a question of what's the forward trajectory of this just given how much you've already done. You guys have commented on how it has more to go, not just because of repricing, but just value-added services on top of that. Help us frame that. I mean, is this a multi-year contribution to TM growth?
I view it as multi-year for a couple of reasons. One is simply when you do the benchmarking and you look at the geographies where we have still yet to grow and have huge opportunity. When you look at the types of products like the VAS where we haven't yet fully penetrated. When you simply look at margin yield, us compared to competitors, there's a significant difference. We have a right to win. That's number one. The second is when you look at how we're actually running the business and the team we have really leaning into it now, there's very strong execution opportunity in front of us and we're hitting it.
Where are you on the volume shift though? I mean, that's another question we get is obviously you've seen the unbranded volume obviously decelerate as you make this transition. Where do we level off and inflect on that?
We have seen some impact from the negotiations that we have had. Partly because in the past when we negotiated, we were really wanting to secure a very high percentage of volume. As a result, we gave some things up in order to do that. As we are moving into just more strategic kinds of relationships, we are willing to release some of that volume intentionally, deliberately in order to have just a healthier margin profile on the overall relationship. You have seen some of that derouting start to happen in the fourth quarter and into this year we expect it to happen. In the first half of this year with respect to Braintree, we do expect lower growth, still growth, but lower growth than what we have seen before.
On the volume side, you're saying?
On the volume side. As we get into the second half, growth should resume and we'll see that move.
Okay. That's really helpful color. All right. Let's shift gears to Venmo monetization. I mean, again, you talked about an exciting opportunity with Pay with Venmo now. And it's definitely an area that you would think should be a big contributor given the activity and how active the 60 + million users are. I think you said again, you expected to grow, I think it was a 40% CAGR through 2027. And so just remind us again, what's going to drive this growth algorithm now for the next couple of years to that kind of a CAGR? And just maybe a little more on the momentum you're seeing on Pay with Venmo usage across both the merchant and the consumer base.
Yeah. If you don't mind, I'm going to expand it and talk about Venmo and also Pay with Venmo. Because Pay with Venmo is one piece of it. Venmo is an asset we've had for a long time that has been one we just haven't, we've kind of let it run itself. It's been a very vibrant product. People love it. We have a lot of opportunity to monetize and to really work with consumers differently. Part of that is how the core app works, sort of a same story here, really making the ease of use, how we add new features like Venmo Groups, contact syncing, just different elements of it so that people can engage and stay. Part of it too is really getting it into Omni and getting it into offline usage.
I use Venmo all the time at the point of sale where I've got my Venmo Debit loaded and people pay me for something and I tap to pay and use Venmo Debit as my credit or my debit payment method there. That is a huge growth factor for us. When you look at, again, some of our peers out there, we are highly underpenetrated in terms of how both Venmo and PayPal, for that matter, are penetrated in debit usage. That's a big piece of it. Pay with Venmo is another piece. You probably, I don't know, you may or may not have used Pay with Venmo yet.
I did. Actually, on a food delivery on the screen actually.
It is awesome.
It's very quick.
Right. It's delightful.
It stays in actually. It automatically clicks through now.
Yeah. It is super fast. It is really cool the way it works. How it is engineered with mobile is a delighter for people. It is something that our merchant population, as you look at it, starting with merchants that are sort of mobile -first, is a real winner of a product.
Yeah. Okay. That's exciting. I mean, I think, again, just to get the word out though, it's going to be part of the marketing campaigns that you're doing?
Part of the marketing campaigns, absolutely. You saw that, again, with some of the work we had done last fall where that was all around PayPal Omni. As we get into this year, you'll see more around Venmo and PayPal both.
Can I ask, you mentioned Omnichannel. Omnichannel has been something that we've heard fits and starts from PayPal over many years. Now we're talking more about it again. You have a partnership with Verifone obviously, right, which I think is going to enable the software embedded in the terminals to automatically accept it as well. Maybe just expand on what that partnership even is and how does it really help. Bigger picture, what are your aspirations from a physical and just broad Omnichannel capability?
You know, the Verifone partnership is important for us. It's foundational in the sense that it allows us to really broaden into point of sale. Candidly, when you're Braintree and you're competing with others who have different kinds of partnerships and different kinds of point of sale or offline capability, you need it as part of your offering. That's really a core part of it. I mean, there are RFPs where we can't participate because we don't have that kind of capability embedded inside PayPal. The partnership just at its base is really important from that perspective. I also think that there are elements around building towards a commerce platform, elements around how do we become more holistic, not only for our merchants, but our consumers that I think the Verifone partnership is going to help us unlock.
I think it'll be really good for us.
Okay. Just touch on PayPal Open. It was a big topic at the Investor Day and maybe help us understand what it does for the business a little bit.
Yeah. PayPal, we have amazing assets. I mean, we really do. When you look across all the products we've been talking about and small business, the problem has been is they've been individual assets in the company that we have bundled together to bring to merchants or in some ways to consumers. What PayPal Open does is really bring that under one umbrella. From a merchant perspective, gives our merchants a single way to access everything we have to offer in a much more seamless and integrated way. Equally importantly, from an internal perspective, it involves a lot of platform convergence for us over the next couple of years. As you can imagine, platform convergence means speed of engineering velocity. It means being able to ship a lot faster on a lot more things.
It means reducing duplication and duplication of effort, so cost reduction and ability to remix and invest in different ways. It allows us also to integrate our product in different ways. Like today, if you're a Venmo, if you have a Venmo account, you can't send me money on my PayPal account. Being able to integrate these backbones in different ways is also going to give us better consumer experience opportunities.
Okay. That plays into the SMB strategy also obviously, right? Maybe just touch a little more on what the mix is now from an SMB standpoint for the business and what the strategy is there. We've all watched PPCP a little bit. I'm curious to know where you are on that roadmap.
Yeah. So 2023, we spent time as a company shifting the product base and really building out and launching PPCP. That was coming online then. In addition, we deprecated a lot of old product. 2024 was about growing PPCP, beginning to build out value-added services around it and really stabilizing and inflecting the business. We did that. As we move forward, it is really about two things. One is really taking the value-added services we already have, whether it is invoicing or other things like that, really building those in so that it is a much more seamless integration. It is also about building out or bringing in partners who can do the same as well. Having a very holistic offering to our SMBs that with Low -Code/ No -Code solutions, we can come in in a different way. We also partner with a lot of partner platforms.
We're a big partner with Shopify, BigCommerce, WooCommerce, Wix, all of those. How we partner with them can either be to process payments. It's also bringing our branded marks, but it's also selling value-added services and Buy Now Pay Later through them as well. All of that is in the mix of this SMB plan.
Very helpful. Just in interest of time, I'm going to ask a question about expenses real quick just because it's obviously been great to hear, I think from you guys, the discipline and see the discipline on expense management. I think you talked about what? First, transaction margin guidance, like we said, 5%-7% this year. And then accelerating hopefully to high single digits by 2027, right? But you're talking about expense growth being roughly half, I think you said, or less than half the growth of transaction margin growth, if I'm not mistaken, right? Just help us understand where you're, number one, is that enough to invest in the business for everything you have to do? Because that's effectively a low single digit growth rate in OpEx, right? And number two, where you see that prioritization?
Because it does lead to a lot of operating leverage in the business.
That is our framework. Our framework is really to drive strong transaction margin growth and do it and to drive operating leverage by only growing OpEx at less than half of that. Our plan for 2025 is to grow OpEx low single digits. What we began doing last year is really remixing the composition of OpEx into tech, product, and marketing. Really taking automation, AI, and just frankly, a lot of inefficiency out of the business as we did it. As we look into 2025, it is really more of that same play. We talked about marketing. We have talked about tech velocity. I mean, all of those things are things that are very, very core and we are very focused on pushing investment into that. We have a lot of opportunity still within PayPal to be more efficient. It is around our velocity.
It's around the clarity of what we're going after and the focus and the decision-making around that. It's around having all of our teams focused on that and candidly repurposing some of our talent and some of our money into the places where it matters. That's really how we look at things. That's what you'll see.
That's great. Guys, any quick questions? I think we have time maybe for one. Oh, right in the front.
Hi, thanks. BNPL clearly is a growing part of the strategy. I would just ask, given what seems like rising competition in that space, what gives PayPal the right to win?
Oh, I think we've got an amazing consumer base. We've got an amazing merchant base. When you put those things together, it gives us a fantastic platform to really work and have that product be at the center of it. I think that is something that really distinguishes us from others is our more than 200 million consumers and our significant merchant population. In addition to that, I talked before about what Michelle Gill has done with that business, really rebuilding that business top to bottom and really reformulating the product, really redoing all of our risk vectors of it and thinking about how we price. I just think we are a real sweet spot for merchants and consumers around how they can engage with us in a different way there.
Guys, I want to thank you very much for staying with us. Jamie, thank you very much. That was incredible. We really appreciate having you guys. For everyone in the room, we have Mass.