uploads///PayPals Active Customer Accounts

What Drives PayPal’s Active Consumer Accounts

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Jul. 26 2016, Updated 8:06 a.m. ET

Growth-driven innovative products

PayPal (PYPL) exhibited strong growth in its user base. Its number of active accounts rose by 11% YoY (year-over-year) to 188 million in 2Q16, driven by significant growth in consumer and merchant engagement on its platform through its innovative products. The company handled 1.4 billion transactions during the quarter, up 25% YoY, while payment transactions per active account rose 13% YoY to 29.

The company handled 1.4 billion transactions during the quarter, up 25% YoY, while payment transactions per active account rose by 13% YoY to 29.

PayPal’s innovative product offerings, including One Touch, Venmo, Xoom, and contextual commerce services, facilitate user engagement, in turn boosting growth in active accounts.

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Assessing PayPal’s product performance in 2Q16

PayPal’s One Touch, its mobile payment app, which lets users make payments with a single touch on mobile platforms, is growing rapidly. Management stated that One Touch remains its most rapidly adopted product. At the end of 2Q16, more than 25 million consumers were using the One Touch payment option at more than 2 million merchants’ sites.

PayPal’s Venmo, the company’s social payments platform, is also growing at a fast pace. Given its strong growth, the company plans to extend the Pay with Venmo pilot to all its users and add more merchants in the coming quarter.

Meanwhile, Xoom, PayPal’s international money transfer and remittances platform, witnessed stellar growth and remains one of the key components of the company’s mobile offerings. The company further expanded the reach of Xoom during 2Q16. Xoom’s US users can now transfer money to 53 countries.

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