PayPal: Venmo Volumes Grow 58 Pct YoY To $58B

PayPal reported second-quarter results Wednesday (July 28) that showed the great digital shift had boosted eCommerce fortunes and that peer-to-peer (P2P) payments during the period surged significantly, helped by cryptocurrency trading.

In terms of headline numbers, the company’s earnings per share came in at $1.15, three pennies better than the Street. The $6.24 billion of revenues were just shy of $6.27 billion expected, growing 19 percent year on year.

Drilling down into the results, total payments volume was up 40 percent to $311 billion.

Venmo, which got a tailwind from cryptocurrency trading, was up 58 percent as measured in payment volumes to $58 billion. There were 76 million active Venmo accounts, up from 70 million at the end of the year.

Transactions Per Account Growth

The company also said that its annualized run rate stands at $1.3 trillion. Transactions per active account were up 11 percent to 43.5, as measured year on year.

With a nod to a drop in the eBay marketplace, the company noted that it is transitioning to managed payments, which is dragging a bit on growth. The transition should be complete by the end of the current quarter, management said.

Volume growth would have been about 48 percent without the impact of eBay (though commentary on the call noted that PayPal still has a major share of checkout on eBay), and as CEO Dan Schulman said, “eBay merchants and consumers want and desire to use PayPal.” Looking ahead, eBay is projected to be a seven percentage point revenue drag. Through the past 12 months, PayPal’s top 15 marketplaces and platforms volume grew 64 percent to roughly $118 billion compared to eBay Marketplaces volumes, which declined 6 percent over the same period.

Total active accounts of 403 million, the company said in presentation materials accompanying the conference call, were up 16 percent, with 32 million active merchant accounts. As many as 44 percent of active accounts were outside the U.S., and the average payment volume of $66, was up 11 percent.

The company said that more merchants accept QR codes, estimating that three casual sellers are signing up to offer PayPal’s QR codes every minute. Those individuals who use QR codes are more engaged, driving 19 percent more TPV on PayPal. Beyond the key driver of the pandemic, QR acceptance is growing as merchants want to boost their digital interactions with customers and drive loyalty with rewards and coupons.

According to the latest results, cross-border total payments volume also recovered, where year-over-year growth in the second quarter came in at 38 percent to $51 billion and represented 16 percent of TPV. Key corridors included U.K. to EU, and the U.S. to China, according to results.

During the Q and A with analysts, Schulman noted that “we continue to be really pleased with the momentum we are seeing in crypto,” and the company remains in the midst of open banking integration, which will increase the ability to fully integrate with ACH and faster payments.