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Global payments operator PayPal announced its earnings for the quarter ended March 2016 (Q1 2016) and reported a net profit of $365 million, an increase of 43.1% compared to $255 million. The company ended the quarter with more than 184 million active accounts and over 14 million merchant accounts. Total payment volume processed was $81 billion, up 31% year-on-year.

Here are some of the key takeaways from their earnings call and results that can be applied to the Indian context:

1. Credit offered on purchases

PayPal has a product which offers credit to buyers to complete a purchase and pay later. This represents about 2% of the company’s total payment volume processed or around $1.62 billion in the quarter. John Rainey, chief financial officer, said that the basket sizes on purchases using credit were on an average 20-30% larger. “Credit benefits PayPal in many ways beyond just a payment transaction. Credit reduces cart abandonment, leading to increased conversion for merchants,” he added.

In India, there are few instances where a user is given credit. Citrus Payment services are rolling out a similar product, as indicated by this YourStory report. The solution will be called Lazypay and will allow Citrus Pay to become an underwriter of transactions and charge consumers, on a fortnightly basis. Fassos has a loyalty programme called Fassos Elite which allows users part of it to pay later for food orders.

2. Contextual payments

PayPal also introduced a new product in the quarter called PayPal Commerce, a set of tools and APIs which will allow merchants to sell across mediums such as  email, social share, blogs, articles, ads, in-app, and “anywhere consumers are online or on their mobile devices.” So far, the product is in beta.

For Indian companies and users, this would be great for impulsive buying. There are already many newsletters which aggregate ecommerce deals and such a button in the email would certainly drive up purchases. On ads, InMobi’s Miip product to an extent facilitates such purchases and has partnered with Paytm for the same.

PayPal’s numbers

  • 4.5 million active customer accounts added, ending the quarter with 184 million

  • 1.4 billion transactions processed, up 26%

  • 28 payment transactions per active account on a trailing twelve month basis, up 12%

  • $81 billion in total payment volume (TPV), up 31%

  • Merchant customers number at 14 million

  • Net profit at $365 million for Q1 2016, up 43% YoY

  • Revenue growth of 19% to $2.544 billion

3. Payments over Facebook and Messenger application

PayPal CEO Daniel Schulman said that their partnership with Facebook and Messenger continued to “expand nicely” without giving more details about the same. Facebook’s Messenger tied up with PayPal in 2015 to enable payments on the messaging application.

Facebook had also started adding a buy button for Shopify merchants in June 2015. Shopify’s purchases are processed by PayPal.

In India, with the launch of the Unified Payments Interface, this might expand to many messaging applications. YES Bank has already announced that it is developing APIs for payments on chat applications.

Download: Press release | Transcript

Image credit: Flicker user Karlis Dambrans under CCBY license.

Update: Headline was changed to better reflect the story.