Need to Know
- PayPal’s Q2 2020 revenue was $5.26 billion, a 25% increase year-over-year.
- The company’s shares are up 3.6%.
- PayPal added 1.7 million new merchants and 21.3 million new users in the quarter; its digital wallet app Venmo processed $37 billion in payments.
- Gains are largely to do with the COVID-19 pandemic; PayPal CEO says the company has “never been more relevant and important.”
As online shopping and e-commerce continue to surge due to COVID-19 lockdown measures, online payments processor PayPal has reported its strongest quarterly earnings ever: the company saw a revenue of $5.26 billion in Q2 of 2020, exceeding expectations and resulting in a 3.6% share price increase.
PayPal’s reported revenue for the quarter was 25% higher than the same time last year. The company, which added 1.7 million new merchants between April and June of 2020, chalks much of its success up to the changing retail landscape post-coronavirus lockdowns.
“Simply put,” president and CEO Dan Schulman said in an earnings call, “our business has never been more relevant and important in the midst of the COVID pandemic. We have seen substantial macro changes that we believe will have a lasting and profoundly positive impact on our business. Merchants are embracing a digital-first strategy, and these trends have fuelled the rapid rise of digital payments. These are durable and meaningful tailwinds, and we are fortunate to have the scale, scope of services and brand reputation to capture the benefits of these trends and extend them to our customers.”
Schulman added that the company has “an ambitious vision for PayPal to be a central player in the future of the digital economy.”
“I’m confident we can drive towards that goal,” he said. “We have a solid track record and an unwavering dedication to delivering essential, differentiated and best-in-class services to merchants and consumers. This is our time, and we intend to seize the moment. Our products and services have never been more important, and we are ready and well-positioned to capture the opportunities that lie ahead of us.”
In addition to the massive spike in merchant sign-ups, PayPal saw an increase in users over the quarter, with 21.3 million new accounts being created in Q2. The company also saw $37 billion in payments come through Venmo, its digital wallet app, over the quarter, marking an increase of 52% year-over-year. Notably, Venmo now has more than 60 million active accounts.
PayPal plans to continue innovating to make its platforms increasingly attractive to both merchants and consumers during the pandemic. The company rolled out a touch-free QR code-enabled payment system in May and plans to make the payment option available to leading retailers in the US and Europe in the coming months. In the US specifically, pharmacy chain CVS will roll out PayPal and Venmo QR codes at its checkouts this year; the company expects the functionality to be available in all 8,200 stores by the end of 2020.