PayPal Sees Increase in Payment Amounts... "Stock Price and Earnings Will Improve Further"

[Asia Economy Reporter Minji Lee] PayPal is expected to show an upward trend in both earnings and stock price, driven by an increase in payment amounts. According to PayPal on the 9th, the company recorded $6.03 billion in revenue and $1.67 billion in operating profit for the first quarter, representing growth of 30% and 84% respectively compared to the same period last year. PayPal significantly exceeded market expectations of $5.88 billion in revenue and $1.48 billion in operating profit.

Reflecting the increased demand for online shopping due to COVID-19, active users grew by 20% to 390 million during the same period. Total payment volume reached $285.4 billion, growing approximately 49.8% year-over-year, and the number of transactions per user increased by 7.1% compared to the previous year. Venmo's payment volume also reached $51 billion, up 64% from a year ago, and total P2P payment volume continued its high growth at around $84 billion, up about 50%.

Jaeeim Kim, a researcher at Hana Financial Investment, said, “An additional 14.5 million net new active users were added, and the leverage effect from the expansion of payment scale and the increased proportion of high-margin products led to margin improvement.”

The cryptocurrency payment service ‘Checkout with Crypto,’ launched last March, is expected to become a new growth engine. PayPal users can purchase products using Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, and PayPal converts the payment amount into dollars to pay merchants.

Last month, PayPal added the ‘Crypto on Venmo’ service, which allows cryptocurrency trading on the Venmo app. More than 30% of Venmo users are already trading cryptocurrencies, raising expectations for increased cryptocurrency transaction volume. Yoonkoo Kwon, a researcher at Korea Investment & Securities, said, “The fact that cryptocurrency trading and product purchases using it can be done within a single app will be a very significant advantage in acquiring new users.”

PayPal is expected to continue its strong performance reflecting the growth trend in transaction amounts. The company raised its revenue forecast for this year from $22.5 billion to $25.75 billion. The expected net increase in active users was also raised from 50 million to 52 million?55 million.

Researcher Kwon explained, “As online payments become a lifestyle habit, PayPal is also taking the lead in the cryptocurrency payment service market. Even as offline activities accelerate with the start of COVID-19 vaccinations, PayPal is expected to maintain its growth momentum.”