PayPal Reveals a Record Quarter with Bitcoin; Crypto Users More Active than Nocoiners
While PayPal exceeded the expectations of Wall Street, its cryptocurrency feature surpassed the company's expectations. The fintech giant is now building its “digital wallet into a superapp.”
Since adding support for cryptocurrencies in October, PayPal's first earnings report reveals that the company reported a fourth-quarter net income of $1.57 billion, tripling from the year before.
The San Jose, California-based company exceeded Wall Street's expectations, and its two new products, cryptocurrency tool and “buy now pay later” feature, surpassed the company's expectations as well.
During the conference call with investors, CEO Dan Shulman predicted that the company's mobile platform would evolve into a “superapp.” “We’re building our digital wallet into a superapp that transcends across payments and financial services,” he added; this would be spurred by new levels of “engagement” among users.
Shuman also revealed that users of Bitcoin and other supported cryptocurrencies (Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC)) actually opened the PayPal app at twice the rate of others. However, he did not share how many people are using the app to buy cryptos on the platform or the company's earnings from the service.
“What Paypal has done is trigger a domino effect. Other digital and mobile payments companies will have to follow suit or be left behind,” said trader and economist Alex Kruger.
The company also reported ending the Q4 of 2020 with 377 million active accounts, up 24%. The quarter saw an additional 16 million active accounts along with 1.4 million merchants, up 137% from Q4-19.
The fintech giant is now working on introducing tools to their 29 million merchants worldwide so that they can start accepting crypto as payment.
“These initial steps are just the beginning of an extensive road map around crypto, blockchain, and digital currencies,” said Schulman. In November, PayPal announced that it plans to integrate Bitcoin into Venmo as well, which they now revealed will be expanding in select international markets in the first half of 2021.
In its press release, PayPal further noted that quarterly revenue jumped past $6 billion for the first time ever, and the company expects revenue to grow to over $25 billion, about 19% in 2021.
On the back of this stellar earnings report, PayPal (PYPL) share price surged to an ATH of nearly $254 on Wednesday and is currently at $251.90.