Maintaining a Protecting Consumers Against Bad Actors Helping Our Partners Advance Fraud Targeting Accuracy Safe Platform for Consumers must navigate a growing digital landscape, with increasingly difficult-to-detect fraud threats. Our The Enhanced Decisioning Data platform Customers risk detection organization strives to continuously launched by Capital One, in partnership with enhance the safety of our platform for our customers, PayPal, helps fight online fraud by combining We strive to promote good habits to safeguard protect against fraud attempts and manage transaction transaction information with Capital One’s customer data through education and resources. losses. We are also focused on educating consumers internal data models, increasing the accuracy of With new threats emerging daily, we are focused on and, where possible, recovering funds when fraudulent fraud targeting as well as approval of legitimate empowering consumers to manage their data and events occur. transactions. protect themselves from fraudulent activity. Our fraud risk management capabilities focused on Strengthening Customer Control preventing bad actors from entering our ecosystem aim Facilitating Transparent Consumer Protection to continuously evolve, including through continued of Data enhancement of our Fraud Defense Cyber Center and With online scams up 87% since 2015,41 we believe it We introduced new ways for consumers to take control protection of customer identity. Our buyer and seller is critical to protect our customers from bad actors of their data, including managing how people find them protection programs protect merchants and consumers across our platforms. According to the BBB Institute for ® on PayPal, accessing what they’ve shared with other from fraud and counterparty nonperformance. These Marketplace Trust’s 2022 BBB Online Scams Report, sites and more. We continue to update our Privacy Hub combined efforts helped us maintain our low transaction consumers who reported paying with PayPal were loss rate39 more likely to get their money back than other online and Security Center to reflect best practices and help Enabling Passwordless Authentication of 0.09% in 2022. build customer awareness. payment systems. We enable secure, passwordless login to PayPal 39 accounts across platforms and devices with passkeys, Annual Transaction Loss Rate Protecting Against Elder Financial Abuse We also continued to expand our automated self- a new industry standard to replace passwords with (% of Total Payment Volume) service portal globally, which is designed to enable cryptographic key pairs. Based on technology that is Through the AARP BankSafe Initiative, we’re helping the our customers in over 200 markets to exercise their designed to be resistant to phishing and not permit any 2022 0.09% financial industry better safeguard elderly consumers’ individual right to access, correct, modify, manage and sharing of data between platforms, passkeys address assets by preventing financial exploitation, educating delete their personal data and marketing choices, as 2021 0.09% individuals and caregivers and enabling easier access 38 one of the biggest security problems on the web: the to banking tools. According to a Virginia Tech Center for applicable. weakness of password authentication from recycled 2020 0.12% passwords across online services. PayPal, as a founding Gerontology study, the financial institution employees 0.00% 0.04% 0.08% 0.12% 0.16% that received BankSafe training prevented 16 times more member of the FIDO Alliance, in monetary losses from financial exploitation than the is helping to champion this 1M+ In 2022, through our Risk-as-a-Service suite of products control group that was not trained. new authentication method to help protect our merchants from fraud and reduce and is one of the first in the their financial losses of chargebacks, we helped save We also partnered with AARP in support of the Stop industry to make it available accounts enrolled in Senior Scams Act by joining the Scams Against to its customers. passkeys since launch our customers more than $35 million across countries, Older Adults Advisory Group, an alliance created to including Australia, Brazil and the U.S.40 in October 2022 In addition, we educate consumers, improve industry training on scam are continuing to explore ways to help our merchants identification and prevention, and develop research on improve efficiencies and reduce costs through dispute- consumer and employee engagement to reduce fraud. automation products. 38 40 Deletion is available in select markets for accounts in good standing that meet applicable record retention timeline requirements. Customer savings estimate based on reduction in chargebacks for merchants using our Fraud Protection Advanced solution in 2022. 39 Lexis Nexis, The True Cost of Fraud estimates that for every $1 of fraud cost U.S. retail and ecommerce merchants $3.75 in 2022. Transaction loss rate represents transaction losses (including expensing associated with buyer and seller protection programs, 41 ® fraud and chargebacks) divided by our total payment volume. BBB Foundation, 2022 BBB Online Scams Report.