TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

PayPal says 86% profit jump flags shift from cash payments in stores

David Henry (Reuters)
New York, United States
Thu, July 30, 2020 Published on Jul. 30, 2020 Published on 2020-07-30T08:53:24+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Buying iZettle will expand PayPal's reach into shops in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden. Buying iZettle will expand PayPal's reach into shops in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden. (Shutterstock/File)

P

ayments processor PayPal Holdings Inc said on Wednesday that a surge in e-commerce transactions and new accounts that drove quarterly profits 86 percent higher was continuing and would support additional investments in mobile-payment tools.

The news lifted the stock as much as 6 percent in after-hours trading. The stock, seen as an e-commerce investment play, was already up 44 percent since PayPal last reported results on May 6.

The company said it expected the trends to continue and that it now expected earnings per share for the full year to increase about 25 percent on 22 percent revenue growth.

Three months ago, the company had withdrawn full-year guidance because of uncertainty about the economic consequences of the coronavirus pandemic.

“We have more confidence in the elevated e-commerce trends we are seeing,” Chief Financial Officer John Rainey told analysts.

What in late April felt like a potentially short-lived surge of panic buying supported by government stimulus checks has become a “durable and profound behavioral shift,” Rainey said.

The company processed US$222 billion in payments over the period, up 30 percent from a year earlier, adjusted for foreign exchange. The rate of payment growth compares with a year-earlier increase of 26 percent that had slowed to 19 percent in the first quarter when the pandemic broke and retail spending collapsed broadly.

The company added 21.3 million accounts during the quarter, up 137 percent from a year earlier.

The company said it would invest $300 million more this year, mostly on its mobile phone app that displays QR codes so that people can go into stores and pay without touching anything.

Net income increased to $1.53 billion, or $1.29 per share, in the quarter ended June 30, from $823 million, or 69 cents per share, a year earlier.

Revenue increased 25 percent to $5.26 billion, topping the average analyst estimate of $5.0 billion.

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.