Venmo, mobile payments push PayPal far beyond its eBay past
PayPal reported strong growth in revenues, earnings, payments volume and users, demonstrating as the company has finally transitioned away from the vestiges of its former eBay ownership.
For the quarter ending Dec. 31, PayPal reported revenues grew 18% to $4.96 billion and total payment volume grew 22% to $199 billion. Earnings per share (EPS) for the quarter were $0.86, up 24% on a year-over-year basis, including a $0.02 benefit from PayPal’s strategic investments.
eBay‘s TPV continues to decline, shrinking by 4% on an FX neutral basis. "Consequently we anticipate that eBay will be approximately 6% of PayPal's TPV by mid-year,” said Dan Schulman, president and CEO of PayPal, during the company's earnings call.
Key drivers in PayPal's growth were increases in net active accounts, growth in mobile usage, increases in one-touch adoption, improvements in Venmo volume and customer engagement. Mobile transactions are a major driver of growth, representing 44% of TPV [total payment volume], said Schulman.Venmo processed $29 billion in volume for the quarter growing 56% and for the year volume increased to $102 billion. PayPal ended the year with Venmo’s customer base exceeding 52 million active accounts driving its current revenue rate of more than $450 million.
Visa will be the exclusive partner for Venmo’s Synchrony to launch a new credit card by reporting that Visa will be the exclusive network partner for this new product, Schulman said.
PayPal's overall overall payment volume for 2019 grew by 25% on an FX neutral basis to $712 billion compared 2018 and that it processed almost $199 billion in Q4 alone. Person-to-Person (P2P) payment volume in the quarter from all three brands (PayPal, Venmo and Xoom) represented $53 billion in volume or about 27% of total payment volume (TPV).
“In 2020 we expect to add approximately 35 million net new active accounts inclusive of our acquisitions and this does not include any one-time impact on NNAs associated with the acquisition of Honey,” Schulman said.
Cross-border trade TPV eclipsed $34 billion growing 14% on a FX neutral basis compared to the same quarter one year earlier. The cross-border share of TPV was 17% for the quarter, down from 18% of TPV one year earlier.