Bitcoin Propels PayPal’s Massive Growth In Q1
Bitcoin and the general crypto market have surged largely due to an influx of institutional investors. Those who have put faith in the “digital gold” are currently smiling all the way to the bank.
The first tech company to espouse crypto’s remarkable returns in their Q1 earnings call was electric car manufacturer Tesla Inc. According to a Wednesday announcement, US payment giant PayPal Holdings has also revealed the impact Bitcoin had on its growth.
PayPal’s Crypto Support Pays Off
In its just-concluded Q1 investors' earning call, payment giant PayPal had remarkable gains with a little help from crypto.
The Q1 earnings report showed a total payment volume (TPV) of $285 billion, up from $277 billion in Q4 holiday season sales.
PayPal also posted a net revenue north of $6 billion and earnings per share of $1.22 against analysts' estimated $1.01 for Q1, 2021.
Alongside this growth, PayPal said it added 14.5 million net new accounts (NNAs), raising its already vast global reach to 392 million with 31 million merchants onboarded so far.
Following the Wednesday earnings call, its shares rose 5% and traded at $260 per share.
President and CEO Dan Schulman describe the results as the strongest first-quarter result in PayPal's history. According to Schulman, their crypto payments adoption played a huge role in attaining these results.
According to Schuman, more than half of its current users opened the PayPal app more than twice a day following the crypto payment support functionality.
Schulman believes that crypto and central bank digital currencies (CBDCs) would eventually foster a more equitable financial system given their growing adoption.
PayPal's immense success in Q1, expected to be slow in business, has been largely due to its crypto payments support. The payment giant enabled crypto trading services last year— opening the gates to customers and merchants on its platform to interact with digital assets.
To further cement its place in the newly emerging digital economy, it extended this capability to its peer-to-peer payment app Venmo. It enabled customers to make crypto payments in a trustless manner.
PayPal is committed to a crypto future following the acquisition of crypto-security firm Curv.
PayPal Aiming To Incorporate CBDCs Once Launched
According to Schulman, they are currently in talks with world governments concerning their CBDC program. Schulman said this is to make sure the payment company is not left out when these countries eventually roll out their digital currencies.
It's finally becoming an arms race for countries piloting CBDC programs as a more efficient payment system. Many national banks have announced intents to launch a CBDC program, with the Republic of Georgia being the latest in a keenly contested race. China, which is the furthest in the rollout of a digital yuan, has served as a catalyst, and more countries are rapidly joining the CBDC bandwagon.