Paypal Thrives on New Account Growth
PayPal reported a record amount of new active accounts added to its platform in April, but it saw a drop in quarterly profit as the Covid-19 pandemic weighs on consumer spending. However, the company is as a trusted brand in the U.S. and its point-of-sale market positions it to weather the storm better than most competitors.
Consumer Adoption
According to S&P Global Market Intelligence, “PayPal added 10 million net new accounts to the platform organically in the first quarter, up from 9.3 million in the same period last year.” The company added 7.4 million net new accounts in April alone, and expects the total figure for Q2 to surpass 15 million.
PayPal leads other payment companies and financial institutions in customer trust by a significant margin, according to a 2019Q4 survey conducted by 451 Research, which is part of S&P Global Market Intelligence.
Moving Forward
PayPal has numerous opportunities to continue to grow as the pandemic accelerates the shift to digital payments. Even as stay-at-home orders are lifted, expect e-commerce to stay substantially elevated for awhile. Good news for Paypal, as the company can serve merchants turning to online for the first time, as well as for services like Pay with Venmo.
The pandemic could also propel the brand’s rumored pursuit of in-store payments and open a new line of business. If, as we move into the next stage of the pandemic, PayPal can position itself as the top choice for providers looking for easy ways to enable electronic payments, it’ll likely fare better than most in the current climate.
The Covid-19 pandemic has brought us to a tipping point, where ecommerce and digital payments have become essential services. People will continue prioritizing safety with contactless payments going forward.
Cheers
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For additional information, see here: https://www.spglobal.com/marketintelligence/en/news-insights/blog/paypal-well-positioned-to-gain-share-in-covid-related-digital-payments-shift
https://451research.com/search?company=PayPal
S&P Global Market Intelligence: Nimayi Dixit, Jordan McKee
