[eMarketer] PayPal plans digital wallet engagement booster as growth slows

PayPal’s total payment volume (TPV) for Q1 rose 15% year over year (YoY) to hit $323.0 billion, decelerating from Q4’s 23% jump, per an earnings release. TPV growth was also down from Q1 2021’s 46% YoY jump.

The company added 2.4 million accounts to end the quarter with 429 million active users. Growth was well below the 9.8 million accounts added in Q4, when new users from its Paidy acquisition bolstered numbers.

PayPal forecasts 10 million new accounts for the year; Insider Intelligence’s projection put the firm’s core global user base growth at 7.2%, or around 14 million. Last quarter, Paypal removed 4.5 million illegitimate user accounts. It may have strengthened its security measures to prevent this from occurring again.

Transactions per account—which PayPal uses as a metric for engagement—remained steady at 11% YoY growth, in line with Q4.

According to eMarketer, here are some of the areas PayPal will focus on going forward.

User engagement: PayPal wants to add higher-value accounts, which the company believes is more cost-effective than trying to retain low-engaged users. Earlier this month, the payments firm revamped its co-brand credit card with new cash-back benefits in a push to boost engagement.

Venmo: PayPal will hike instant transfer fees for Venmo users in an effort to generate the app’s maiden profit. Schulman also noted plans to integrate Venmo with Amazon are progressing toward an H2 target launch. The partnership will be a huge opportunity for Venmo to use Amazon’s vast sales to grow its payments volume.

Read the full eMarketer article here

www.emarketer.com