Mobile Payments

PayPal’s ‘Best Quarter Ever’

It was a good day to be PayPal yesterday (April 27), as the firm announced that total payment volume is up 29 percent from a year ago to $81 billion — outdrawing analyst expectations of $79 billion for Q1. Revenue was up 19 percent to $2.54 billion, a slight beat on The Street that predicted $2.5 billion, and earnings per share clocked in at $0.37 — an increase over the $0.29 of a year earlier.

PayPal CEO Dan Schulman was clearly pretty happy with the analyst-exceeding results, calling Q1 2016 his “best quarter ever” since joining PayPal in 2014.

“When you have 184 million active accounts, moving that customer engagement number even one point from quarter to quarter is significant,” Schulman noted in a post-earnings interview.

Particularly touted during the call was the rapid growth and expansion of One Touch, which, according to PayPal, is now part of the lives of 21 million consumers and merchants in 144 markets.

Also on big display during yesterday’s earnings call was the large growth underway with some of its newer acquisitions, like Venmo and Xoom.

P2P payments app Venmo saw its transaction volume rise a staggering 154 percent in the quarter from a year ago, to $3.2 billion. Venmo’s use cases have also expanded in the last few months. During Q1, PayPal announced a pilot program that would allow users to tap the service to pay for goods and services with some online merchants (who would then pay fees to PayPal). So far, in pilot form, that program has grown to include over a half-million users and is scheduled to roll out to all of Venmo by the end of the year.

“Early customer feedback has provided strong validation,” Schulman noted.

Venmo could also theoretically see a future tie-in with Acorns Grow — a micro-investing application for millennials that PayPal recently led a funding round for.

Xoom, the international money transfer business, is also facing expansion. Going forward, Xoom will be in 53 countries, as opposed to the 30 it was in when PayPal bought it last November.

“We’re creating a presence in emerging markets where there hasn’t been a presence for PayPal,” said John Kunze, vice president of Xoom, in an interview.

In other highlights from PayPal’s Q1 report, PayPal added 4.5 million active customer accounts, bringing its total monthly active accounts to 184 million. San Jose’s favorite firm also processed 1.4 billion transactions, with monthly transactions per account averaging in at 28 — a 12 percent increase over this time last year.

“Our first quarter results continue to demonstrate the power of our global payments platform to attract and engage consumers, increasing our global scale and, in turn, attracting new merchants and partners to PayPal,” said Schulman. “Our focus on payments and ability to innovate for merchants and consumers continues to differentiate PayPal and drive our growth in a dynamic and competitive environment.”


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