When tallying profit margins, 280 basis points count.

That’s the amount of margin decline suffered at PayPal last quarter compared to 2Q12, and the fall is surprising.

Don’t get us wrong, a 23% profit margin and $1.62 billion of revenue last quarter is nothing short of lovely, but the margin was 25.8% in the same quarter in 2012. Not surprisingly, eBay stock is off around 9% since these numbers came out on July 17.

PayPal blames the decline in revenue on “lower transaction margin and investments in consumer awareness, product initiatives and merchant ubiquity.” Maybe. But can it be that eBay runs PayPal for declining margins? (That’s a rhetorical question for all you Bank Innovation newbies.)

No, the better explanation is slowing growth. Over the last six quarters, the growth rate for the net number of PayPal payments has declined, to 24% from 31% in 1Q12. Again, 24% is a mighty high growth rate, but a slowdown will hamper net margins.

To be sure, PayPal has lots going on. To hear the official eBay review of PayPal’s quarterly earnings is to hear a story of golden performance and prospects.

In Q2, PayPal continued to expand its footprint, increasing merchant coverage and share of checkout. Finishing the quarter with a 132 million active accounts globally, PayPal added almost 5 million new accounts during the period, the fifth consecutive quarter of accelerated growth. Merchant services generated strong growth of 29% for the quarter, accelerating three points from Q1 and representing $30 billion of payment volume. PayPal continues to be a global leader in mobile payments, generating strong growth and driving incremental sales for merchants.

PayPal continues to push forward in mobile payments.

Mobile is enabling seamless shopping experiences for consumers and PayPal is focused on delivering great product experiences for merchants and consumers anytime, anywhere. For example, RadioShack went live in Q2 with PayPal’s point of sale options in the majority of their U.S. locations. PayPal is all also driving innovation for small merchants. The cash for registers program was announced in Q2 and went live earlier this month in the U.S.

Even in the “who knows if it will work” world of digital wallets, PayPal seems to be making inroads, with 132 million digital wallets in the cloud, availability in 193 countries, according to the company.

Here’s how management sums it up:

PayPal has powerful competitive advantages. PayPal’s core business is strong and growing. And as merchants and consumers meet better, more convenient and smarter payment options across every commerce channel, PayPal is committed to leading disruptive innovation.

Yes, but there’s that nagging issue of declining growth and net margins. Robert Swan, eBay’s chief financial officer and senior vice president, pointed recently to the “accelerating double-digit active user growth,” as a reason to feel “thrilled” about PayPal. Whether he will feel thrilled about other PayPal metrics in future quarters is another question entirely.