FILE PHOTO: The German headquarters of the electronic payments division PayPal is pictured at Europarc Dreilinden business park south of Berlin in Kleinmachnow, Germany, August 6, 2019. REUTERS/Fabrizio Bensch

(Reuters) - PayPal Holdings Inc PYPL.O forecast full-year adjusted profit below analysts' expectations as it invests in technology to fend off competition in a crowded digital payments space, sending its shares down 4%.

To tackle competition, PayPal has also been spending on savvy acquisitions such as its $4 billion purchase of shopping and rewards platform Honey last year, its largest ever.

Total operating expenses surged nearly 15% to $4.16 billion in the fourth quarter.

San Jose, California-based PayPal expects full-year adjusted profit in the range of $3.39 per share and $3.46 per share, below analysts’ expectations of $3.49, according to IBES data from Refinitiv.

Total payment volume (TPV), the dollar value of transactions processed, rose about 21% to $199.40 billion, but came in below analysts’ estimates of $202.7 billion.

The company’s net income fell to $507 million, or 43 cents per share, in the quarter ended Dec. 31, from $584 million, or 49 cents per share, a year earlier.

Stripping out one-time items, the company earned 86 cents per share, beating analysts’ estimate of 83 cents.

Revenue rose 17.4% to $4.96 billion, above analysts’ expectation of $4.94 billion.