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Checking out PayPal’s recent earnings, Q4 2020

  • PayPal reported record highs in its revenue performance in the latest quarter of 2020.
  • After exceeding the volume of its crypto projections, the firm plans to expand its crypto services in the UK as its first international market.
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Checking out PayPal’s recent earnings, Q4 2020

PayPal reported its strongest performance in net active users with a total of 377 million active accounts and a quarterly growth in total payment volume of $277 billion in its Q4 earnings release last month.

“This is the strongest quarterly growth we've reported in history and represents 14 points of acceleration from 2019. Our merchant services volume grew 40 percent, another record for PayPal, accelerating each quarter in 2020,” said PayPal’s chief financial officer, John Rainey in the company’s Q4 2020 earnings call. 

Widespread e-commerce adoption and digitization spurred by the pandemic proved integral to the global payments network’s customer acquisition and elevated engagement levels. It drove 4.4 billion transactions in the fourth quarter of 2020. The fintech currently supports an ecosystem of over 29 million merchants interacting with around 350 million customers. 

“Consumers and businesses of all sizes have embraced a new digital erasing the distinction between online and off-line. A digital first world is no longer our future,” said Dan Schulman, PayPal’s president. “It's our current reality, and it will forever change the way we interact across almost all elements of our lives.”

A major takeaway from the digital payments provider’s performance in 2020 includes its 11.8 percent rise in transaction revenue to $5.7 billion since the addition of its crypto offerings that were rolled out last October. “Even with high initial expectations, the volume of crypto traded on our platform greatly exceeded our projections,” said Schulman.

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The firm plans to expand its crypto services to its first international market in Britain this year. It will also enable its crypto platform functionality to include the use of crypto balance as a funding source for customers to shop at its 29 million affiliated sellers. 

“These initial steps are just the beginning of an extensive road map around crypto, blockchain and digital currencies,” said Schulman “We are already working with the regulators and central banks to reimagine and shape the next generation of the financial system as consumers no longer want to handle cash.”

PayPal’s embrace of cryptocurrency has been swayed by the mainstream surge of digital currencies last year. As public perception increasingly warms up to crypto, major financial and tech firms have announced their interest in cryptocurrency with the introduction of crypto based products and services. Last month Tesla bought $1.5 billion worth of bitcoin and will accept it as digital payments for its products. Recently Mastercard also announced that it will be opening up its network to facilitate select digital currencies. Previously, the network launched cards that support crypto based transactions. The upcoming Coinbase IPO has also been generating major excitement in investor circles, as the firm it expected to top a $100 billion valuation, according to investor reports

“PayPal is likely watching Wall Street's strong interest in the forthcoming Coinbase IPO and thinking they should capture some of that excitement around crypto currencies,” said William Quigley, managing director of cryptocurrency investment firm Magnetic. “There are very few ways for public investors to participate in the growth in blockchain and cryptocurrencies.  Public investors would welcome the ability to gain exposure to crypto through a well known brand like PayPal.”

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