Mobile Payments Fuel PayPal’s Success
PayPal is growing faster than analysts had expected, and much of their success can be attributed to mobile payments.
Based on recent financial releases, PayPal earned $3.14 billion in revenue during the second quarter of 2017, an increase of 18.3% from last year. The company had projected earnings of $3.09 billion. Mobile payments made up $36 billion of the company’s earnings–an increase of 50%.
Earnings have also been led by the increase in PayPal accounts. In the second quarter, PayPal and its subsidiaries including, Braintree, One Touch, Venmo, and Xoom, added a record 6.5 million accounts and now reach 210 million customers. These consumers are also using these services more frequently. The California-based company logged 32.3 transactions over the past 12 months, up 10% from the previous year.
Shareholders earned 46 cents instead of Wall Street’s predicted 43 cents, and shares were up 1% yesterday. Prices closed at $58.79, which is a 56% increase since PayPal separated from eBay two years ago. Since the company has parted ways with eBay, it has transformed from a payment button service into a tool that allows shoppers to find and pay merchants and also send money to their friends through smartphone apps. The addition of Venmo has been particularly lucrative for the company, as it allows users to easily send money to their friends or family, which can make activities such as splitting rent or bills easier.
PayPal continues to create strategic partnerships to increase their growth. In the past few weeks, the company announced enhanced payment options with Citi and a partnership with Samsung that allows Samsung Pay to support PayPal payments.
The company told investors they are on track to exceed their yearly goals and are expecting between $12.775 and $12.875 billion in revenue for 2017.