PayPal ticks up 2% on earnings, Visa partnership

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PayPal reported earnings after the bell on Thursday, showing $2.65 billion in revenue for the quarter, when analysts were expecting $2.6 billion. Adjusted earnings per share was also in line with Wall Street estimates at 36 cents.

Shares ticked up 2 percent in after-hours trading, in part because of a Visa announcement that was timed with earnings. The new partnership with Visa emphasized that they will be collaborating more and will make it easier for customers to move money from their PayPal account to their bank accounts using their Visa debit card. The partnership also means that PayPal digital wallet payments will be accepted at retail locations that facilitate Visa contactless payment transactions. 

“Our agreement with Visa enhances our capabilities, offers the potential to establish new contexts for our consumers and merchants, and lays the foundation for additional partnerships,” said PayPal CEO Dan Schulman, in a statement.

Bill Ready, SVP and global head of product at PayPal, said that the goal is “for customers to pay however they want, wherever they want.” With Visa, they’re “working together to build great frictionless commerce experiences.”

PayPal also raised its full year revenue guidance to a range of $10.75 to $10.85 billion. They are expecting an adjusted earnings per share between $1.47 and $1.50 for the year.

The company returned $300 million to stockholders last quarter, by repurchasing 8 million shares of common stock.

Investors have been curious to see if PayPal is able to successfully monetize its Venmo business. A popular mobile peer-to-peer payment system with millennials, the company does not charge for these transactions. Venmo processed $3.9 billion in payment volume this quarter, though it did not reveal the revenue breakdown. 

Venmo recently introduced merchant payments, where businesses would pay PayPal a small cut of each transaction in order to have the “pay with Venmo” option for its customers.

One of PayPal’s biggest businesses is Braintree, a white label mobile payments solution that powers transactions on everything from Uber to Airbnb. When a customer takes an Uber, PayPal makes money by taking a cut of the transaction. Braintree has developed a substantial client list and has become a force in the mobile payments space. 

PayPal shares are up 13 percent since spinning off from eBay a year ago. The company has a market cap of $49 billion.

Featured Image: PayPal