PARTI Item1. Business stolen financial information), and malicious activities by counterparties, represent a significant risk to merchants and consumers, as well as their payment partners. We provide merchants and consumers with protection programs for certain purchase transactions completed on our payments platform. We believe that these programs, which help protect both merchants and consumers from financial loss resulting from fraud and counterparty non-performance, are generally consistent with or broader than protections provided by other participants in the payments industry. Our protection programs are designed to promote confidence on both the part of consumers, who will only be required to pay in certain circumstances,such as receiving their purchased item in the condition significantly as described, and merchants, who will receivepaymentfordeliveringanitemtothecustomer. Our ability to help protect both merchants and consumers is based largely on our proprietary, end-to-end payments platform and our ability to utilize the data from both sides of transactions on our two-sided network, specifically from buyers andsellers and from sendersand receiversof payments.Our ongoing investmentin systemsand processesis designedto enhance the safety and security of our products and reflects our goal of having PayPal recognized as one of the worlds mosttrustedpaymentsbrands. ANNU AL Competition REPOR The global payments industry is highly competitive, dynamic, highly innovative, and increasingly subject to regulatory scrutiny and oversight. Many of the areas in which we compete evolve rapidly with innovative and disruptive technologies, T shifting user preferences and needs, price sensitivity of merchants and consumers, and frequent introductions of new products and services. Competition also may intensify as new competitors emerge, businesses enter into business combinationsandpartnerships,andestablishedcompaniesinothersegmentsexpandtobecomecompetitivewithvarious aspectsofourbusiness. Wecompetewithawiderangeofbusinesses.Someofourcurrentandpotentialcompetitorsareormaybelargerthanwe are, have larger customer bases, greater brand recognition, longer operating histories, a dominant or more secure position, broader geographic scope, volume, scale, resources, and market share than we do, or offer products and services that we do not offer. Other competitors are or may be smaller or younger companies that may be more agile in responding to regulatoryandtechnologicalchangesandcustomerpreferences. Wedifferentiate ourselves to merchants through our ability to innovate and develop products and services that offer new payment experiences for our merchants, demonstrate that they may achieve incremental sales by using and offering our services to consumers, support transactions on our payments platform across varied technologies and payment methods, through the simplicity and transparency of our fee structure, our seller protection programs, analytics, and risk management,aswellasothermerchantservices.Inaddition,wedifferentiateourselvestoconsumersthroughtheabilityto use our products and services across multiple commerce channels, including e-commerce, mobile, and payments at the point of sale, and without sharing their financial information with the merchant or any other party they are paying; our customer service, dispute resolution, and purchase protection programs; and our ability to simplify and personalize shopping experiences. We invest resources towards improving our products and services, offering choice in payment options, providing excellent customerservice,and buildingbrandsthat merchantsandconsumerstrust. Our business faces competition from a wide range of businesses and from all forms of physical and electronic payments. Weface competition from banks and financial institutions, which provide traditional payment methods (particularly credit cardsanddebitcards(collectively,“paymentcards”),electronicbanktransfers,andcredit),paymentnetworksthatfacilitate payments for payment cards or proprietary retail networks, payment card processors, and “card on file” services. We also face competition from providers offering a variety of payment products and services, including tokenized and contactless paymentcards,digital wallets and mobile payments solutions, credit, installment or other buy now pay later methods, real- time payment systems, P2P payments and money remittance services, card readers and other devices or technologies for payment at point of sale, virtual currencies and distributed ledger technologies, and tools that simplify and personalize shopping experiences for consumers and merchants. Our products and services face competition from all forms of payments, which include paper-based payments (primarily cash and checks), credit cards, debit cards, electronic bank transfers, account-to-account payments, credit, installment methods, digital wallets and mobile payment solutions, contactless payments (including contactless cards, tokenized cards, Near Field Communication (NFC) based solutions, andQuickResponse(QR)code-basedsolutions),andvirtualcurrencies,suchascryptocurrenciesandstablecoins. In addition to the discussion in this section, see “Item 1A. Risk Factors” under the caption “We face substantial and increasingly intense competition worldwide in the global payments industry” for further discussion of the potential impact of competitiononourbusiness. •2022AnnualReport 7