PayPal Holdings Inc (NASDAQ: PYPL) and other fintech companies have declined since the year began. One of the reasons for this drop is the fear of tighter policies and increased interest rates. This has caused companies in multiple industries to experience a drop in stock value.

PayPal also gave tough guidance after announcing its financial results. Furthermore, the company adjusted its revenue guidance from 18% to 15%-17% during its Q4 2021 earnings conference. The company also cut back on its goal of 750 million customer accounts by 2025.

While the future of fintech companies seems bright, analysts are still unsure of their short-term growth. This situation is made worse by the effects of the pandemic and Russia’s invasion of Ukraine, which could affect its market volatility.

More Americans use digital accounts as primary checking accounts

Cornerstone Advisors has found that more Americans with checking accounts use Square, PayPal, and Chime. This has led to the growth of fintech companies and the decline of prominent banks like Wells Fargo & Co (NYSE: WFC), JPMorgan Chase & Co (NYSE: JPM), and Bank of America Corp (NYSE: BAC).

Since 2020 the popularity of digital banks has increased among Gen Z, Gen X, and Millennials. Meanwhile, megabanks are losing their customers. For instance, the percentage of Gen Z Americans who have megabanks as their primary checking account has dropped to 25% from 35%.

Surprisingly, the number of people using community banking has gone up across all four generations. Experts believe that this is because people need a personal touch for their money.

Meanwhile, Tutanota LLC has warned PayPal of an unsolicited mini-tender to buy about 360,000  PayPal common stock, representing less than 1% of the company’s outstanding common stock.

The $125 per share offer price is subject to various conditions, including the stock’s closing price going for more than $125 on the last trading day. Unless Tutanota waives these conditions, shareholders will receive a price lower than what should be on the market.

China’s use of digital payment is on the rise

Since the pandemic, China has been using digital payments more. The country mainly uses mobile devices to make these purchases and go online. Many companies have benefited from this, including PayPal and Alibaba Group Holding Ltd (NYSE: BABA)