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Mobile commerce, also known as m-commerce, is the act of purchasing goods and services via mobile devices, such as smartphones or tablets. Earlier this year, the consulting group comScore found that people spend more time shopping on mobile devices over PCs by a 2-to-1 margin. Business Insider predicts m-commerce to reach $284 billion by 2020, good for a projected 45% of e-commerce.
There may be no company better positioned to capitalize on this growing trend than PayPal Holdings. In the company's third quarter, its mobile payment volume rose to about $40 billion, a 54% increase year over year. CEO Dan Schulman certainly understands the importance of the trend. In the conference call following PayPal's most recently reported quarter he said, "Mobile is becoming the defining force in digital payments. It is rapidly blurring the distinction between online and offline and accelerating the adoption of digital payments."
PayPal's One Touch platform certainly deserves the lion's share of the credit for PayPal's growth in this area. One Touch allows users to essentially register a device and then complete purchases on that device -- through websites and apps that accept PayPal as a method of payment -- with one click. The platform has seen explosive growth and more than 70 million consumers and six million merchants now participate in One Touch. The feature works so well that it sports a sales conversion rate twice as high as the industry average. This means that once a consumer starts a shopping experience they are twice as likely to complete the transaction using One Touch than another payment method.
PayPal's growth in mobile commerce is unlikely to slow down anytime soon. This quarter Venmo users will be able to use PayPal's popular P2P app to make purchases at vendors wherever PayPal is accepted. PayPal investors should be able to enjoy the ride as the company rides the m-commerce wave to more market-beating returns. fool.com
PayPal beat The Street when it reported fourth-quarter earnings after the bell on Wednesday. The global payments giant surpassed analyst expectations for both sales and profit.
PayPal reported $3.71 billion in revenue on a foreign-exchange neutral basis, or 24% growth from the same period last year. Analysts were expecting $3.63 billion in revenue for the quarter.
Adjusted earnings per share were 55 cents, compared to the 52 cents that Wall Street forecast.
But shares later ticked down as much as 14% in after-hours trading, likely due to a guidance forecast that just missed the mark. PayPal is expecting its overall revenue for the year to be between $15 billion and $15.25 billion. The midpoint was beneath what analysts surveyed by Yahoo Finance had been forecasting, with $15.16 billion. Other estimates had been as high as $15.26 billion.
PayPal said its adjusted earnings per share was expected to fall between $2.24 and $2.30. Yahoo Finance analysts had been expecting $2.25.
The company also announced an agreement with Synchrony Financial. Synchrony is acquiring PayPal’s consumer credit receivable portfolio, worth $6.4 billion. The transaction is expected to close in the third quarter of the year.
The company processed $131 billion in total payments volume for the fourth quarter, showcasing 32% growth.
PayPal has grown to 227 million active customer accounts, after adding 8.7 million for the quarter.
PayPal separated from eBay in 2015 and is currently the larger of the two companies, with a market cap of $103 billion. eBay is valued at $42 billion.
The two companies agreed to extend their partnership through July 2023, making PayPal the default payment option for eBay.
PayPal is also the owner of Venmo, the popular peer-to-peer payments platform. The app processed $10.4 billion in payments in just the fourth quarter alone.
Venmo’s overall growth for the year was 97%, processing $35 billion in payments in 2017.
That's one hell of beat down (- 8%), after renewing with EBAY through 2023 and having 24% revenue growth this quarter. I'm still holding, despite the likely drawdown of the ebay relationship around 2020. Paypal needs to get into crypto - now that would surely double it overnight. :)
They might get a short term pop, but it probably would not last. The company is just too big, although I suspect that they will be accepting cryptos at some point. Yesterday, Square announced that its Cash App customers could now "instantly" buy and sell bitcoin. The stock closed up 3% for the day. It is down 3% this morning.
I closed my position in PYPL today @77.47. I originally bought EBAY in 2013, and got the Paypal for free when they spun it off. Cost basis can be difficult to figure when this happens, but I calculate it as 38.70. Was bought in my 401K brokerage account, so I do not believe I have any need to track cost basis, but it is good to know.
PayPal is buying payments start-up iZettle for $2.2 billion ahead of IPO cnbc.com Zettle provides mobile card readers and other digital payment products to small businesses. A merger would catapult PayPal into hundreds of thousands of brick-and-mortar storefronts globally in an effort to bring its digital payments tool into physical retailers and compete with companies, like Square.