PayPal hit a record 140% surge in net new active users in April from Jan & Feb levels, adding 250,000 new accounts per day. In all, 7.4 million new customers joined PayPal in April alone. As the pandemic “rapidly accelerated” the move towards digital payments, PayPal saw its best month since going public: growing revenue by 20%.
Will the new customers stick? These new customers now make up 6% of PayPal’s customer base. PayPal said they could be lifetime customers since they have used PayPal three or more transactions in 10 days — an indicator the company uses to measure churn. The question is how many of these new users will stick on after restrictions are eased worldwide. And that is something the company has also been watching. There is 2-3 times growth rate in usage since before pre-COVID19 times in Germany and Austria, which have eased shelter-in-place measures. A majority of the new actives are coming from core markets such as Western Europe, USA, Australia, which are either amidst a lockdown and could be looking at relaxations in this quarter. Moreover, governments are asking PayPal to expand its main service and Venmo into in-store checkout flows.
Venmo, which is more of a “social payments service”, saw a 48% YoY rise in total payments volume; payments limits were hiked for up to $5,000 per week. Entire families are now using Venmo, since children can be on it. The current surge in usage comes from QR code based payments for groceries, for payments for online classes, and for charity.
PayPal’s international remittances service Xoom has seen a 400% surge in usage, which PayPal president and CEO Schulman believes has high stickiness, since payments are being sent once or sometimes twice a month.
The main numbers:
- Active accounts: 325 million, up 17% YoY
- Total Payment Volume: $191 billion, up 19% YoY
- Number of transactions: 3.3 billion, up 15% YoY; 1.2 billion transactions in April
- 100% YoY increase in revenues from groceries
- 50% YoY rise in revenues from electronics, fashion, home & garden