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To: Glenn Petersen who wrote (83)4/25/2017 4:51:51 PM
From: Intelim
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Millenials already tend to spend more than they earn. There is no stopping them now!

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From: JakeStraw4/26/2017 4:08:38 PM
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PayPal Reports First Quarter 2017 Results and Raises Financial Guidance for Full Year
finance.yahoo.com

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To: JakeStraw who wrote (85)4/30/2017 4:44:59 PM
From: Intelim
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Stunning quarter for PayPal.

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From: Glenn Petersen6/23/2017 10:50:13 PM
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Instant bank transfers are coming to PayPal and Venmo

Posted 6 hours ago by Sarah Perez
TechCrunch
June 20, 2017



PayPal announced this morning a plan to speed up money transfers between its service, Venmo and users’ bank accounts for those with supported MasterCard and Visa debit cards. This new “instant transfers” service will be available at a rate of $0.25 per transaction, and will deliver funds in a matter of minutes, instead of the day or so it typically takes when using PayPal or Venmo.

PayPal has been operating in the peer-to-peer payments business for nearly two decades, but the company has been more recently challenged by a number of newcomers, like Square Cash, for example, whose key advantage has been the ability to “cash out” to your bank account instantly.

Now PayPal and Venmo will offer a similar option for debit card holders with supported cards from Visa and MasterCard. The company says the feature will be available to the vast majority of cardholders, save for a handful of very small institutions.

The feature arrives at a time when PayPal is shifting its focus from being a competitor to Visa and MasterCard, to being more of a partner. For years, PayPal encouraged users to link their bank accounts to its service, as a means of routing around the large payment networks. But last year, things changed.

The company announced it was teaming up with Visa last July, and then unveiled a nearly identical partnership with MasterCard in the fall. In both cases, the idea was largely focused on helping PayPal better establish itself as a checkout option at point-of-sale – a response to the threat of Apple Pay. But the deals netted the company other benefits as well.

For example, PayPal said last year the expanded partnerships would also mean that users could instantly cash out their funds from their PayPal accounts to their supported MasterCard or Visa accounts, and the companies would no longer charge PayPal the digital wallet operator fee. PayPal would also make adding cards from Visa or MasterCard a clearer option on par with adding a bank account.

The instant transfer service is now launching into beta with select PayPal users, as a result of these deals, as well.


In most cases, the funds transferred between PayPal or Venmo and the end user’s bank account (via the supported debit card) will arrive in a matter of minutes. However, some banks may take up to 30 minutes, PayPal notes.

While Square Cash now charges a 1 percent fee for instant transfers, PayPal’s instant service will charge $0.25 per transaction – something that could help users save when performing larger transfers.

The launch of instant transfers is also arriving at a time when PayPal is facing new competition from the banks themselves. Zelle, a real-time Venmo competitor backed by over 30 U.S. banks, is going live this month, promising instant transfers through the banks’ own websites and apps, and soon, in a standalone Zelle app.

Zelle, which is built on the clearXchange Network, is already being used by some banks today. That network saw over 51 million transactions in Q1 2017, totalling over $16 billion – far larger than Venmo, which reported $6.8 billion in total payments volume in its last quarter.

However, PayPal’s combined services of PayPal, Venmo and Xoom processed $64 billion in 2016, and Venmo is the fastest-growing of PayPal’s products. Venmo’s service increased transactions 135% last year to reach $17.6 billion in 2016.

In other words, PayPal is making a smart move to address the Zelle threat by launching an instant option in its app already used by over 200 million users, along with the quickly growing Venmo, which App Annie last year estimated has 9 million users.

The new service is also arriving ahead of iMessage’s support for peer-to-peer payments which hits this fall with iOS 11’s public launch.

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From: JakeStraw7/12/2017 12:13:44 PM
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PayPal expands Apple integration, will become a payment option in 11 new markets
techcrunch.com

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From: JakeStraw7/17/2017 10:17:37 AM
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PayPal Holdings, Inc. had its price target raised by analysts at Barclays PLC to $63.00. They now have an "overweight" rating on the stock.

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From: Sr K7/30/2017 3:25:21 PM
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Why Can’t Americans Ditch Checks?

In an era of smartphones, online banking, and Venmo transfers, the rest of the world has weaned itself off paper.

By Katie Robertson

July 26, 2017, 4:00 AM EDT

bloomberg.com

[excerpt]

Attempts are being made in the U.S. to modernize the system, but a faster-payments task force the Fed convened in 2015 to investigate how to bring the U.S. banking system in line with the rest of the world has acknowledged formidable hurdles. “Given the breadth and complexity of the U.S. market,” it said in the first installment of its final report, “it is more challenging to implement improvements to the payments infrastructure in a coordinated way.” Last week, it released the second half of that report, setting a goal of implementing platforms to deliver real-time, secure electronic payments everywhere by 2020. That technology already exists—but as the report notes, unlike in other countries, any changes in the U.S. will be market-driven.

And they’ll be a long time coming. Americans haven’t seen any major improvements to checking since a 2003 federal law known as Check 21 first allowed banks to process checks electronically, without having to handle the actual paper checks. These days, practically no paper checks go through the banking system anymore, clearing times have come down to about a day—similar to electronic payments—and you can deposit checks from your phone.

Expats like Jane Searle, an Australian in New York, remain unimpressed. “People sometimes talk about this app that photographs checks and processes them, as if that’s innovative,” she said. “It’s just a bolt-on process to a practice that is shamefully backward.”

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From: JakeStraw8/2/2017 12:19:23 PM
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You can now use PayPal through Skype’s mobile app
techcrunch.com

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From: Glenn Petersen8/4/2017 11:00:58 PM
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The Accounting Tack That Makes PayPal’s Numbers Look So Good

By GRETCHEN MORGENSON
New York Times
AUG. 4, 2017



Dan Schulman, chief executive of PayPal, taking a selfie after his company’s initial public offering in July 2015. Credit Andrew Gombert/European Pressphoto Agency
__________________________________

Investors liked what they saw in PayPal’s second-quarter financial results, reported by the digital and mobile payments giant on July 26. Revenues grew to $3.14 billion in the quarter that ended in June, an increase of 18 percent over the same period last year. Total payment volume of $106 billion was up 23 percent, year over year.

Even better, PayPal’s favored earnings-per-share measure — which it does not calculate in accordance with generally accepted accounting principles, or GAAP — came in at 46 cents per share, 3 cents more than Wall Street analysts had expected. The company has trained investors to focus on this number, rather than on the less pretty GAAP-compliant numbers most companies are judged by. And focus they did.

Exceeding analysts’ estimates — “beating the number,” in Wall Street parlance — is crucial for any corporate leader interested in keeping his or her stock price aloft. Even the smallest earnings miss can send shares tumbling.

Examining how a company meets or beats analysts’ estimates, therefore, can be illuminating.

PayPal’s stock has been on a tear this year, up almost 50 percent since January. At a recent $59, its shares are trading at over 40 times next year’s earnings estimates. It is clearly an investor darling, providing all the more reason to dig into its numbers.

Naturally, many factors contributed to PayPal’s second-quarter earnings. But one element stands out: the amount the company dispensed to employees in the form of stock-based compensation.

How could stock-based compensation — which is a company expense, after all — have helped PayPal’s performance in the quarter? Simple. The company does not consider stock awards a cost when calculating its favored earnings measure. So when PayPal doles out more stock compensation than it has done historically, all else being equal, its chosen non-GAAP income growth looks better.

Accounting rules have required companies to include stock-based compensation as a cost of doing business for years. That’s as it should be: Stock awards have value, after all, or employees wouldn’t accept them as pay. And that value should be run through a company’s financial statements as an expense.

Consider the practice at Facebook, a company PayPal identifies as a peer. In its most recent quarterly income statement, Facebook broke out the roughly $1 billion in costs associated with share-based compensation that it deducted from its $9.3 billion in revenues.

Back in the 1990s, technology companies argued strenuously against having to run stock compensation costs through their profit-and-loss statements. Who can blame them for wanting to make an expense disappear?

They lost that battle with the accounting rule makers. But then they took a new tack: Technology companies began providing alternative earnings calculations without such costs alongside results that were accounted for under GAAP, essentially offering two sets of numbers every quarter. The non-GAAP statements — called pro forma numbers or adjusted results — often exclude expenses like stock awards and acquisition costs. And the equity analysts who hold such sway on Wall Street seem to be fine with them.

As long as companies also showed their results under generally accepted accounting rules, the Securities and Exchange Commission let them present their favored alternative accounting.

PayPal is by no means the only company that adds back the costs of stock-based compensation to its unconventional earnings calculations. Many technology companies do, contending, as PayPal does, that their own arithmetic “provides investors a consistent basis for assessing the company’s performance and helps to facilitate comparisons across different periods.”

Still, some technology leaders are dumping the practice. In addition to Facebook, Alphabet said this year that it would no longer present results that excluded the costs of stock-based compensation.

Dave Wehner, Facebook’s chief financial officer, told investors on a May conference call that the company would report results that include share-based compensation because it’s a true cost of running the business.

Ruth Porat, chief financial officer of Alphabet, which is Google’s parent company, said the same thing on a conference call in January.

PayPal takes the opposite approach. And look at what it does to its results.

Under generally accepted accounting principles, PayPal reported operating income of $430 million in the second quarter of 2017. That was up almost 16 percent from the $371 million it produced in the same period last year.

But under PayPal’s alternative accounting, its non-GAAP operating income was $659 million in the June quarter, an increase of almost 25 percent from 2016.

So what’s to account for the added $230 million in operating income under PayPal’s preferred calculation? Most of it — $192 million — was stock-based compensation PayPal dispensed to employees in the June quarter and added back to its results as calculated under GAAP.

That was a big jump — 57 percent — from the $122 million PayPal handed out during the second quarter of 2016. And back in 2015, PayPal reported just $89 million in stock awards.

I asked PayPal why it has been ratcheting up its stock-based compensation. Amanda Miller, a PayPal spokeswoman, declined to discuss why the company was raising its stock-based pay, and the role the increase played in the company’s recent results. She provided this statement: “We pay for performance and align our compensation with how shareholders are rewarded. We believe our treatment of stock-based compensation is broadly consistent with our peer group.”

But this isn’t accurate, according to the companies PayPal lists as peers in its proxy filing. At least four of those companies — Alphabet, Facebook, Mastercard and Visa — do not exclude stock-based compensation from their earnings calculations as PayPal does.

Craig Maurer is a partner at Autonomous, an independent investment research firm in New York. He follows payments companies and rates PayPal’s stock an underperformer.

In a telephone interview, Mr. Maurer was critical of how the company accounts for stock-based pay. He said that as a percentage of PayPal’s non-GAAP operating income, stock-based compensation has risen to 29 percent this year from 17 percent in 2015.

“They are literally taking a cost out of their income statement, moving it to a different line and backing it out of results,” Mr. Maurer said in an interview. “And you can see that it’s adding significantly to their ability to meet earnings expectations. If you backed out the difference between what we were expecting on stock-based comp in the quarter versus what they reported, it was 2 cents of earnings.”

In other words, the increase in stock-based compensation made a big contribution to PayPal’s results versus what analysts had been expecting.

PayPal’s stock-based compensation practices have another noteworthy effect: They drive executive pay higher at the company. Here’s how.

The company says it has three main metrics for calculating its managers’ performance pay each year. One of those measures, its proxy shows, is non-GAAP net income. So, as PayPal awards more and more stock to its executives and employees, non-GAAP net income shows better growth. And the greater that growth, the more incentive pay the company awards to its top executives.

For PayPal insiders, at least, that’s one virtuous circle.

nytimes.com

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From: JakeStraw10/3/2017 11:45:44 AM
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PayPal Holdings, Inc. had its price target raised by analysts at Citigroup Inc. to $77.00. They now have a "buy" rating on the stock.

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