PayPal’s payments volume growth rebounded in Q2 just as it added a record number of new accounts.
And the swelling user bases of PayPal’s services should help it successfully develop and grow its offerings.
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The digital payments titan recorded $222 billion in total payments volume (TPV) in Q2 2020, surging 30% year-over-year (YoY), per an earnings release. This comes after the company’s TPV grew just 19% YoY in Q1 2020 thanks to a drop in consumer spending caused by the early days of the coronavirus pandemic.
But digital payments have taken on new importance during the pandemic since consumers are trying to limit their potential exposure to the virus, propelling PayPal’s performance. This led PayPal’s number of daily active accounts to climb 37% annually and reach a level of usage for the full quarter that’s comparable to the usage it experiences during the high-volume period between Thanksgiving and Cyber Monday.
PayPal added more new users in Q2 than in any previous quarter in its history because more consumers and businesses are taking an interest in its offerings due to the pandemic. The firm brought in 21.3 million net new active accounts (NNAs), soaring 137% YoY.
This comes after PayPal added 20.2 million NNAs in Q1 2020, up 118% YoY, showing that the pandemic is pushing consumers to its services. PayPal’s Q2 gains included almost 1.7 million merchants signing up for PayPal, Venmo adding enough accounts to surpass 60 million users, Honey attracting almost 300% more active users than it did in Q1, and Xoom bringing in 600% more NNAs than it did last quarter, CEO Dan Schulman said on the company’s earnings call. And PayPal expects to bring in around 70 million NNAs in 2020 as the pandemic continues — it added approximately 37.4 million in 2019 — positioning it to rapidly expand its reach.
The swelling user bases of PayPal’s services should help it successfully develop and grow its offerings because it has millions more consumers and merchants in its ecosystem.
PayPal is working to expand its offerings to control more of the payments funnel and play a role in more types of payments. The company recently acquired Honey in an effort to control the product discovery process and added QR code payment capabilities to tap into in-store payments. And it’s not done expanding, considering Schulman mentioned adding more services in the next several quarters related to bill pay, subscriptions and rewards management, and more. These services should help PayPal capture more revenue, and adding millions of users now gives it more consumers and businesses that are already engaged in its ecosystem to push them to.
PayPal’s surging user base could be particularly important to the success of its QR code initiative. PayPal should have more success …read more
Source:: Business Insider