Transformation Complete, PayPal is Now a Platform Brand


PayPal Mastercard cashback

PayPal President and CEO Dan Schulman says the company has now successfully transformed from being a products-based company to being a platform, and customers are now buying a suite of services rather than single products.

“Three years ago, we set off to transform PayPal. Our goal is to create an open platform for digital commerce to deliver innovative mobile checkout experiences that blur the lines between physical, online and mobile shopping,” Schulman noted on the company’s earnings report call with analysts on July 26th.

That transformation has given PayPal had a very good year so far. According to its quarterly earnings reported July 26th, PayPal has generated $3.136 billion in revenue, reaching 210 million active accounts including 17 million merchant accounts, and an overall growth rate of 12% year-over-year. Engagement increased by 10% year-over-year, with customers transacting 32.3 times per year, up from 29.4 times a year ago.

The company processed $106 billion in payment volume in the quarter driven by mobile, which accounted for 34% of the payments across the platform.

As Schulman told analysts, “Our performance is driven by the cumulative effect of multiple incidents. We have fundamentally retooled our technology and infrastructure, leading to significant improvements and availability and develop our productivity. We have meaningfully improved our core experiences and expanded our suite of products. Our overall scale is accelerating due to the network effects of our two-sided (customer- and merchant-facing) platform. It is clearly a macro secular shift toward digital payments.”

One Touch, the mobile feature that eliminates the need for customers to log in for every transaction, boosted its customer transactions to more than 60 million.

PayPal also completed a rollout of Choice, “shorthand for giving consumers more freedom over how they can pay” via PayPal’s platform thanks to an expanding array of partnerships. Choice is now active across the company’s on-boarding, servicing and checkout in the U.S., where more than 13 million customers have opted into Choice. PayPal is now rolling out the feature in Australia, Canada, the UK and Japan.

Having transitioned to a two-sided network, serving consumers and merchants simultaneously, while making rivals such as Visa and Mastercard into partners, has buttressed the brand against competitors including Apple and Square. Its partnership with Visa now extends globally, and through Visa and Mastercard, PayPal and Venmo users stateside can transfer money with an eligible debit card, linked to their PayPal account.


Partnerships with JPMorgan Chase and Bank of America enables customers to integrate their cards into PayPal, create a new PayPal account.

An expanded relationship with Citi and Chase makes Citi ThankYou Rewards Points and Chase Ultimate Reward Points available in the PayPal wallet for shopping at 17 million merchants.

PayPal’s open technology platform has expanded partnerships with Google, Apple, Facebook and Samsung and Android Pay users on Google’s Chrome mobile web can now pay at millions of online merchants by using their PayPal account and fingerprint authentication.

PayPal and Apple expanded iTunes integration enabling customers to buy games, music, movies and in-app purchases via iPhones and iPads in 12 countries including the U.S., Australia and parts of Europe.

A partnership with Samsung US means users can now pay for purchases in-store via Samsung Pay’s mag-stripe emulation technology, furthering the company’s position as an underlying open payments platform and wallet worldwide.

While the bulk of the 16 million merchants using PayPal are small vendors, the company is actively pursuing larger ones like Amazon. In addition, it sees growth through pursuing in-store adoption in order to support the full eco-system of online, in-app, and in-store payments.

To that end, the company announced the acquisition of Swift Financial, a leading provider of working capital solutions to small businesses in the U.S. along with PayPal Global Sellers, a cross-border trade service targeting SMB’s in the U.S.

As partnerships expand so too must technical capabilities and new platforms such as virtual reality. PayPal’s Innovation Lab is leading that charge, where Mike Todasco, PayPal’s Director of Innovation commented, “When you step in here, you can think differently. That creativity is inside of each and every one of us.”

A recent addition to PayPal’s Board of Directors due to her success in brand-building is veteran media executive Ann M. Sarnoff, President of BBC Worldwide – Americas. According to PayPal’s press release, “Ann is an ideal addition to PayPal’s Board because of her tremendous success at driving consumer engagement with the brands she has led. She has also been critical to the success of multiple innovative partnerships and joint ventures across the media industry, most recently resulting in increased engagement for BBC Worldwide’s global brands.”

What’s more, Sarnoff will “continue to reimagine the traditional financial services industry to address the changing needs of people around the globe as cash continues to digitize and mobile technology reinvents our lives,” said Schulman.