As PayPal readies to share its third-quarter financials after the bell on Monday (Nov. 8), market watchers are expecting news about the platform’s hotly awaited super app, as well as updates on its buy now, pay later (BNPL) activities, crypto growth and further moves into the connected economy.
It’s been a busy year for the payments giant, and its earnings release could resolve more than a few questions. Its Venmo peer-to-peer (P2P) money transfer service has been slugging it out with Square’s Cash App, for instance, but PayPal’s new super app may give it an edge.
MoffettNathanson Analyst Lisa Ellis told Investor’s Business Daily that “with the wallet re-design, PayPal will be more full-service than Cash App.”
That “redesign” is a forthcoming app that PayPal believes can free up a lot of smartphone storage space, while simplifying and improving the user experience. With PayPal’s more than 400 million active users and roughly 29 million merchants on its network at last count, a new app that does the job of many others could be a game-changer well beyond P2P.
“No consumer is going to have 40 or 50 apps on their phone,” PayPal President and CEO Dan Schulman told PYMNTS’ Karen Webster. “There must be super apps that come together to consolidate all of your financial instruments.” He added that the app would help consolidate rewards points, and would let users choose BNPL options and even use QR codes.
The new app will build on the redesigned PayPal app, which launched in September with features including PayPal Savings, a high-yield savings account provided by Synchrony Bank.
See also: Connected Economy: PayPal’s Dan Schulman Settles Into His Role as Catalyst
A Series of Strategic Moves for a Connected Economy
Having achieved total payments volume (TPV) of approximately $311 billion and 4.7 billion transactions in the second quarter, PayPal is focusing on a series of strategic moves to capitalize on its strong position, which touches every part of the payments-powered, horizontally connected economy.
A big one is the launch of PayPal Zettle for U.S. small businesses, designed as a complete digital point-of-sale solution. As PayPal’s Senior Vice President of Omni Payments Jim Magats told PYMNTS, “It’s a natural extension of what we’ve been doing online and on mobile over the course of the last 20 years, serving [small to mid-size businesses] with an in-store solution that interoperably works with an online solution.”
The company also jumped into crypto with both feet a year ago, enabling eligible U.S. account holders to buy, hold, sell and pay with cryptocurrency directly from their PayPal account. The 2021 launch of PayPal Checkout with Crypto is seen by some as a killer use case that gives PayPal a leg up over competing apps and leading crypto exchanges like Coinbase.
Read also: PayPal Zettle US Launch Brings ‘Commerce in Box’ to SMBs
Looking to BNPL, Rewards
Nasdaq reported that “when comparing the number of unique website visits from January 2021 to September 2021 to the same period last year, a 19.10% rise was seen.” The bump may bode well for PayPal’s other headline moves in 2021 — namely, BNPL and loyalty rewards integration.
Already a major force in buy now, pay later, PayPal acquired the Japanese BNPL platform Paidy in September for about $2.7 billion.
PayPal VP and Head of Japan Peter Kenevan said that “combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market.”
On the rewards front, after acquiring rewards platform Honey in early 2020, PayPal added cash-back rewards in October, sweetening the rewards offer in a bid for a greater share. “Our goal is to develop products and tools that make it easier to shop smart, and introducing cash back delivers users even greater benefit and choice,” said Frank Keller, PayPal’s SVP of enterprise solutions and digital commerce.
See also: PayPal’s New Super-App Positioned to Deliver Next-Level Connected Experience
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