[Overseas Stocks Spotlight] "PayPal Accelerates Digital Payment Transition... Transaction Volume and New Subscribers Increase"

[Asia Economy Reporter Eunmo Koo] The novel coronavirus disease (COVID-19) has accelerated the shift to digital payments, leading to a significant increase in PayPal Holdings (PYPL US)'s transaction volume and new user registrations.

PayPal's revenue in the second quarter of this year reached $5.26 billion, a 25% increase compared to the same period last year, and its earnings per share (EPS) rose 49% to $1.07, surpassing consensus estimates by 5.2% and 22.7%, respectively. On the 2nd, Samsung Securities analyst Jaewoo Kim explained in a report, "This is due to changes in consumer trends caused by COVID-19, specifically the accelerated shift to digital payments." He added, "For example, PayPal's total payment volume (TPV) reached $222 billion, a 30% increase from the same period last year. Notably, the number of new users reached 21.3 million, a 140% increase year-over-year, marking an all-time high that even exceeds the total number of new users acquired throughout 2016."

The shift to contactless living due to COVID-19 has reinforced the utility of digital payments. Analyst Kim stated, "The record-breaking quarterly performance is because the contactless lifestyle brought about by COVID-19 has made individuals recognize the convenience of digital payments," adding, "Along with the activation of e-commerce and the acceleration of offline stores' O2O sales, PayPal's unique competitiveness as a digital wallet has been highlighted."

This has also positively impacted various mobile payment system companies acquired by PayPal. Kim noted, "First, the payment volume of the P2P remittance app 'Venmo' increased by 54% year-over-year to $37 billion, and the number of active users on the online shopping platform 'Honey' tripled compared to the previous quarter," adding, "Combined with PayPal's efforts to add various payment methods such as QR code payments, structural high growth is expected to continue."

Assuming the growth rate of this quarter continues in the second half of the year, PayPal has raised its full-year guidance. It projects a 20% increase in transaction volume, 22% growth in revenue, and 25% growth in EPS compared to the same period last year. Analyst Kim forecasted, "Structural changes in payment trends will further solidify PayPal's growth," and "With the expansion of PayPal's ecosystem and consumer recovery, the pace of profit growth could accelerate even more."

This content was produced with the assistance of AI translation services.