PayPal’s most recent earnings results spotlight the continued digital shift, as active user counts eclipsed pre-pandemic levels, and Buy Now, Pay Later (BNPL) volumes surged by triple-digit percentages.

PayPal’s active accounts at the end of the second quarter stood at 429 million, up 6% year-over-year, and the tally includes 35 million merchant accounts.

Total payment volumes grew by 13% on an FX-neutral basis to $339.8 billion. Excluding eBay, the company’s revenues were up 14%.


Transactions Per Active Account Surge, Too 

The company said that transactions per active account grew 12% to 48.7 payment transactions.

PayPal’s core daily active accounts at the end of the quarter had gained more than 40% relative to the pre-pandemic period, the company said in its supplemental filings.

Venmo volume increased 6% to $61 billion, marked by 90 million active accounts. Overall P2P volume, which includes PayPal, Venmo and Zoom, was up 3% to $93 billion (on top of 41% growth in the same period last year). Venmo commerce volume grew by 250% year over year. P2P transactions represented 27% of TPV in the quarter.

During the conference call with analysts, CEO Dan Schulman said that the “inherent network effect” remains in place and that the company is “doubling down on checkout, our PayPal and Venmo digital wallets and our Braintree platform.”

He noted on the call that 80% of the company’s volume was driven by 30% of PayPal’s active accounts in the quarter.

With a nod toward continued fine-tuning of the payments experience, the company is testing its new mobile SDK software development kid, which will remove friction, he said.

“We are also enhancing our checkout user experience to better serve our nearly 400 million consumer accounts by surfacing the most relevant funding instrument based on past purchase behavior, merchant category and purchase price, among other attributes,” he said on the call.

Schulman added that “we’ll continue to expect to grow significant faster than the rate of eCommerce going forward, both on branded and branded [offerings] and on checkout.”

BNPL activity has been ramping, he said, marked by $4.9 billion in volume, up 226% year over year — and used by 22 million consumers, and offered by more than 200,000 merchants.

Schulman said, too, that engagement has been on an upswing with digital wallets, and management noted on the call that wallet users are twice as likely to choose PayPal at checkout. The company, he said, is working on “a debit card reboot” which will be a metal form factor with rewards built in — and which opens up the total addressable market by 20 million to 30 million users.

CFO John Rainey, who is being replaced by Blake Jorgensen, formerly of Electronic Arts, effective Aug. 3, noted that credit losses in the most recent quarter were $68 million, only a few basis points.

During the question and answer session, management noted that Elliott Investment Management has taken a $2 billion stake in the company and said that discussions with the activist investor have been focused on operational improvements and long-term strategy


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