Need to Know
- PayPal shares its Q1 earnings, revealing the fintech company’s continued growth post-pandemic.
- PayPal added two new customers every second throughout the quarter.
- The popularity of money-sending app Venmo and the rise of small business owners using digital and QR code payments contributed to the company’s massive growth.
- PayPal continues its evolution into an all-in-one digital wallet, with plans to launch a new, personalized financial app later this year.
PayPal’s Q1 results are in and the fintech company’s evolution into the “next-generation digital wallet” is working: PayPal’s shares are up 5.5% and in just one quarter, the company brought in over $6 billion in revenue (a 29% jump).
According to PayPal’s CEO Dan Schulman in the latest earnings call, PayPal brought on “two new customers every second throughout the quarter” and “a new merchant every 5 seconds.” The fintech giant brought in an estimated 1.5 million new merchants in Q1 alone, an increase of over 100% from last year, and expects to exceed 400 million active accounts by the end of Q2.
Both PayPal and its hugely-popular subsidiary, Venmo are seeing high demand for QR code payments, too. Nearly 1 million merchants on PayPal and Venmo accept QR codes, with additional merchants signing up every 28 seconds.
Much of PayPal’s recent success is due to Venmo’s popularity, which according to Schulman, brought in $51.4 billion in payments, up 63% year-over-year.
Venmo launched a Visa-powered credit card last fall which can be used anywhere Visa is accepted. And the money-sending app now lets users “buy, sell and hold cryptocurrencies” and allows small businesses to easily accept Venmo payments. Over 300,000 small businesses are using Venmo, says Schulman.
Small businesses were able to expand their markets last year by using digital payments apps like PayPal, and are also seeing an increase in transactions and 17% more repeat buyers.
“Small businesses who used PayPal last year drove 75% of their online sales from outside their local neighborhood,” said Schulman. “And 65% of small businesses in the U.S. who use PayPal have cross-border sales versus less than 5% of all other small businesses. Across the shopping journey, merchants who use PayPal see a substantial lift.”
Between cards and QR codes, in-store efforts equaled $6.4 billion in Q1.
As the popularity of digital payments rises and fintech companies build out their roster of services, consumers are choosing apps from companies they trust. Fortunately for PayPal, the company’s longevity in the industry, and countless partnerships with reputable brands, have made it a trusted household name.
“Merchants continue to turn to PayPal in record numbers as we are now an essential platform to enable their transition into the digital economy,” said Schulman. “Small businesses who used PayPal during the peak of the pandemic saw their overall revenues grow by 25% versus a negative 9% for all other small businesses in the same time period.”
According to Schulman, the new wallet “will be an all-in-one personalized app that will empower our users to make the most of their money and strengthen their financial lives every day. We will provide increasingly customized and unique shopping, financial services and payments experiences for our customers.”