PARTI Item1A.RiskFactors OutsideoftheU.S.,weprincipallyprovideourservicestocustomersintheEuropeanEconomicArea(“EEA”)andtheUnited Kingdom(“U.K.”) through PayPal (Europe), our wholly-ownedsubsidiarythat is licensed and subject to regulation as a credit institution in Luxembourg. PayPal (Europe) may be subject to enforcement actions and significant fines if it violates applicable requirements. Additionally, compliance with applicable laws and regulations could become more costly and operationally difficult to manage due to potentially inconsistent interpretations and domestic regulations by various countries in the region. Applicable regulation relating to payments, anti-money laundering and digital services, which are key focus areas of regulators and subject to extensive new regulation, could subject us to additional and complex obligations, risks and associated costs. If the business activities of PayPal (Europe) exceed certain thresholds, or if the European Central Bank (“ECB”) so determines, PayPal (Europe) may be deemed a significant supervised entity and certain activities of PayPal (Europe) would become directly supervised by the ECB, rather than by the Luxembourg Commission de Surveillance du Secteur Financier, which could subject us to additional requirementsand would likely increase compliance costs. PayPal (Europe) is also subject to regulation by the ECB under the oversight framework for electronic payment instruments,schemesandarrangements(PISA),whichmayalsoleadtoincreasedcomplianceobligationsandcosts. ANNU In manyoftheothermarketsoutsidetheU.S.inwhichwedobusiness,weserveourcustomersthroughPayPalPte.Ltd.,our wholly-ownedsubsidiarybasedinSingapore.PayPalPte.Ltd.issupervisedbytheMonetaryAuthorityofSingapore(“MAS”). AL ThePaymentServicesActcameintoeffectinSingaporeinJanuary2020.PayPalPte.Ltd.hassubmittedanapplicationfora REPOR Major Payment Institution license to the MAS to continue to provide payments services, and is operating under an exemptionfromholdingalicensewithina statutorytransition period while the application is pending. Upon PayPal Pte. Ltd. T obtaining this license, we will be required to comply with new regulatory requirements, which will result in increased operationalcomplexityandcostsforourSingaporeandinternationaloperations. In many of the markets outside the U.S. (other than Singapore) served by PayPal Pte. Ltd. or by local branches or subsidiaries subject to local regulatory supervision or oversight, as the case may be, there may be uncertainty whether our Singapore-based service is subject only to Singapore law or also to other local laws, and whether such local laws might require a paymentprocessorlikeustobelicensedasapaymentsservice,bank,financialinstitution,orotherwise. There are substantial costs and potential product and operational changes involved in maintaining and renewing licenses, certifications, and approvals, and we could be subject to enforcement actions, fines, and litigation if we are found to violate any of these requirements. There can be no assurance that we will be able to (or decide to) continue to apply for or obtain any licenses, renewals, certifications, and approvals in any jurisdiction. In certain markets, we may need to rely on local banks or other partners to process payments and conduct foreign currency exchange transactions in local currency, and local regulators may use their authority over such local partners to prohibit, restrict, or limit us from doing business. Any of the foregoing could, individually or in the aggregate, result in substantial additional costs, delay or preclude planned transactions, product launches or improvements, require significant and costly operational changes, impose restrictions, limitations, or additional requirements on our business, products and services, or prevent or limit us from providing our productsorservicesinagivenmarket. CryptocurrencyRegulationandRelatedRisks Our current and planned customer cryptocurrency offerings could subject us to additional regulations, licensing requirements, or other obligations. Within the U.S., we are regulated by the New York Department of Financial Services as a virtual currency business, which does not qualify us to engage in securities brokerage or dealing activities. The regulatory status of particular cryptocurrencies is unclear under existing law. For example, if the SEC were to assert that any of the cryptocurrencies we support are securities, the SEC could assert that our activities involving that cryptocurrency require securities broker-dealer registration or other obligations under the federal securities laws. The rapidly evolving regulatory landscape with respect to cryptocurrency may subject us to additional licensing and regulatory obligations or to inquiries or investigations from the SEC, other regulators and governmental authorities, and require us to make product changes, restrict or discontinue product offerings, implement additional and potentially costly controls, or take other actions. If we fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or otherenforcementactions,potentialfines,andotherconsequences. Weholdourcustomerscryptocurrencyassetsthrougha third-partycustodian.Financial and third-party risks related to our customer cryptocurrency offerings, such as inappropriate access to, theft, or destruction of cryptocurrency assets held by our custodian,insufficient insurance coverageby the custodianto reimburseus for all such losses, the custodiansfailure to maintain effective controls over the custody and settlement services provided to us, the custodians inability to purchase or liquidate cryptocurrency holdings, and defaults on financial or performance obligations by the custodian, or counterparty financial institutions, could expose our customers and us to loss, and therefore significantly harm our business, financial performance,andreputation. We have selected a custodian partner, and may in the future select additional custodian partners, that are subject to regulatory oversight, capital requirements, maintenance of audit and compliance industry certifications, and cybersecurity procedures and policies. Nevertheless, operational disruptions at any such custodian, or such custodians failure to •2022AnnualReport 17