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Mobile Payments Help PayPal Keep Its Lead among Its Competition

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PayPal’s TPV rose by 29% in 2Q16

PayPal (PYPL) witnessed strong growth in its TPV (total payment volume) during 2Q16. The company processed about $86.2 billion in TPV, up 29% YoY (year-over-year) on a currency-neutral basis.

Strong growth in mobile payments along with an increasing number of new merchants to PYPL’s platform remained the primary reason for growth.

PayPal’s merchant services payment volume came in at $71.3 billion, a rise of 36% YoY. In 2Q16, PayPal added a significant number of new merchants to its platform, thereby ending the quarter with 14.5 million active merchant accounts.

The company further stated that leading brands including IKEA, Cathay Pacific, Carnival, VKontakte, and Talbot’s are some brands that now use PayPal’s platform.

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Mobile imperative to PayPal’s growth

PayPal’s mobile volume, which represents about 28% of its TPV, came in at $24 billion, up 56%, during the quarter. PayPal is focusing on strengthening its position in the mobile segment as the digitization of money and the rapid adoption of mobile technology around the globe makes the segment the key driver for future growth.

PayPal managed to grow its mobile volumes substantially in 2Q16. Management noted that mobile volumes rose by 45% YoY about two quarters ago, while the growth rate in 2Q16 came in at 56%. PayPal faces increased competition in the mobile division, as large technology companies such as Apple (AAPL) and Google (GOOG) are also fortifying their positions in the mobile digital payment space, which could lower PayPal’s volume growth.

Meanwhile, Venmo, the company’s social payments platform, processed about $3.9 billion of TPV in 2Q16, reflecting a strong growth of 141% YoY.

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