PayPal Aims to Broaden Offerings Beyond Payment Tools, CEO Says — Interview

What happened

PayPal Chief Executive Enrique Lores said in an interview that PayPal is aiming to broaden its offerings beyond payment tools, focusing on services through Venmo, branded checkout, Braintree and processing solutions to grow revenue and transaction margin.

Confirmed

Global impact / market context

PayPal wants more of its profit to come from services beyond checkout, and expanding Venmo from a peer-to-peer payments tool into a broader financial-services platform could increase revenue per active account and reduce reliance on transaction fees.

Analyst inference

PayPal is working through a turnaround, and Lores said financial services will be key to growing transaction margin dollars, a measure of earnings from transactions it processes, while early Venmo debit and Pay with Venmo growth show the push is starting to produce results.

Analyst inference

What to watch

1. Venmo Debit monthly active accounts grew 55% in the third quarter and Pay with Venmo rose more than 40%, according to Lores, who called this an early sign of results. Confirmed
2. Watch whether PayPal expands Venmo into a broader financial-services platform and reports higher revenue per active account, as Lores said the company will increasingly focus on that metric. Proposed
3. Track growth in transaction margin dollars, which Lores expects financial services to drive, and whether a better understanding of consumers helps revive the branded checkout business. Analyst inference

Evidence

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