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PayPal reported one of its strongest quarters in its history, but the company’s shares fell by more than 5pc.
On Monday (2 November), PayPal published its earnings for the third quarter of 2020, reporting $5.46bn in revenue and a record $247bn in total payment volume.
Dan Schulman, president and CEO of PayPal, said the quarter was “one of the strongest in our history”, with revenue growing 25pc year-on-year.
The payments company also added more than 15m net new active accounts, a year-on-year growth of 55pc, bringing the total active accounts to 361m by the end of the quarter. It also said it processed 4bn payment transactions, up 30pc.
PayPal’s CFO and EVP for global customer operations, John Rainey, said the company “outperformed with sustained momentum” in Q3 2020. “The strong results we are reporting today demonstrate the strength of our diversified platform, the scalability of our business and our earnings power.”
Online shopping has been soaring worldwide amid the Covid-19 pandemic, so an increase in both user accounts and revenue for the major online payments company may not be surprising.
However, shares in the company fell by more than 5pc in extended trading on Monday. This could be due to the company not giving preliminary guidance for its 2021 fiscal year, which it typically does in its Q3 earnings report.
PayPal did discuss its full-year expectations for 2020, saying it’s on track to end the fiscal year with 70m net new active accounts. Total payment volume growth is now expected to be approximately 30pc, while revenue growth is expected to be between 20pc and 21pc.
Going forward, Schulman said PayPal is investing to create “the most compelling and expansive digital wallet that embraces all forms of digital currencies and payments and operates seamlessly in both the physical and online worlds”.
So far this year, the company launched a QR code payment functionality that can be used by small businesses that do not have card machines and typically rely on cash.
More recently, the company also launched its first business debit card in Ireland, Italy, France, Spain and Austria, which it said gives business users instant access to their funds and balance for online and physical purchases, as well as “unlimited cashback”.
