PayPal’s Historic Q3 Cements Its Spot Atop the Fintech Mountain

The fintech giant is investing in digital features such as BNPL for both to help everyone "participate in the digital economy."

Need to Know 

  • PayPal and its subsidiary Venmo reported record-breaking third-quarter growth, growing by 36% and 61% respectively.
  • PayPal added over 15 million new users while signing on 1.5 million new merchants. Venmo has hit 65 million users.
  • The fintech company is investing in digital innovation to grow its platforms and create “one of the best digital wallets in the world.”
  • PayPal debuted its own buy now, pay later program called Pay in 4 this year, which it plans to bring to Venmo next year.


PayPal is reporting a record-breaking quarter, sharing that Q3 payments rose 36%. PayPal-owned Venmo also reported its best quarter ever, including a 61% increase in transactions and 65 million total users.

Between PayPal’s new growth to hit almost $247 billion in payments and Venmo hitting $44 billion, PayPal is now reporting a “run rate” of approximately $1 trillion. Revenue for Venmo is projected to hit $900 million in 2021.

PayPal added 15.2 million net new active accounts, an increase of 32 percent from the previous year, and also signed on 1.5 million new merchant accounts—double the pre-pandemic amount. In Q2, PayPal saw a 25% year-over-year increase and added 21.3 million new users. 

PayPal’s Toronto office.

The massive growth could be attributed to a number of factors, which are all rooted in PayPal’s investment in digital technology. 

“Our scale, two-sided network, trusted brand, strong relationships with the regulators around the world, and our AI and data modeling capabilities can all be leveraged to ensure our PayPal and Venmo apps are essential parts of our customers’ daily lives,” said PayPal CEO Dan Schulman.

In an effort to keep up with a number of other financial institutions, PayPal this summer debuted its own buy now, pay later (BNPL) program.  

The program, called Pay in 4, allows customers to pay for purchases in installments over a six-week period, while partners and merchants get paid upfront. 

Next, PayPal plans to bring BNPL to Venmo, in addition to its recently-launched Venmo Credit Card. Available in next year’s Q1, the Venmo credit card is integrated directly with the Venmo app and includes a contactless chip and the ability to split payments in real-time. 

“The Venmo credit card will be fully rolled out in Q1,” said Schulman. “I think it is the best credit card in the market. It is a true extension of the Venmo app and fully linked into its capabilities. It is the first to have a personalized QR code embossed on the card, as well as the contactless chip. So that transactions can be split right at the table and reflect it instantaneously on your Venmo feed.”

For both PayPal and Venmo apps, even more updates are coming.

“Over the next year, both the Venmo and PayPal apps will undergo a fundamental transformation intended to dramatically increase their functionality and drive engagement,” explained Schulman. “Our goal is to provide our customers with a comprehensive set of services and tools to manage their financial lives as well as enhance their ability to shop both online and offline. This expanded suite of services will include enhanced direct deposit and check cashing, budget and savings tools, bill pay, investment alternatives, including crypto, subscription management, buy now, pay later optionality and all of Honey’s shopping tools from wish list, price monitoring, deals, coupons, and rewards.”  

PayPal is committed to investing in digital innovation to improve its suite of services and position itself as a world leader in digital finance.

“PayPal is in a strong position to help shape a future, where everyone, not just the affluent, can participate in the new digital economy,” said Schulman. “We are investing to create one of the most compelling and expansive digital wallets in the world.”