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PayPal Holdings Inc. reported a strong earnings performance during the first quarter of 2019, and disclosed for the first time key metrics for its Venmo business, which reached 40 million active accounts during the period.
Venmo processed $21 billion in total payment volume, a 73% increase from a year ago.
The company reported important growth metrics during the quarter, including 9.3 million net new active accounts, compared with 8.1 million net new actives in the year-ago quarter, representing a 15 percent increase from the prior-year period.
The company has a total of 277 million customer accounts, including 22 million merchant accounts, CEO Dan Schulman disclosed.
"We had a great start to the year, with strong growth in revenue, net new active accounts and engagement across our platform," Schulman said in the company's earnings announcement. "We launched new strategic relationships with some of the world's largest marketplaces and platforms including Instagram and MercadoLibre."
He told security analysts on the quarterly conference call that the company is on pace to reach 300 million net new actives, a new record.
"We added 40 million net new actives in the past 12 months, an all time record," he told analysts. "That is over two times our trajectory from just two years ago. And even as we add record net new actives, our customer engagement continues to grow."
Other key indicators included a 28% rise in payment transaction to 2.8 billion, compared with the year-ago quarter and a 22% increase in total payment volume to $161 billion. The company also reported an average of 37.9 transactions per active account on a trailing 12-month basis, an increase of 9% from the year-ago period.
Person-to-person funds transfer volume rose 41% to $42 billion, representing 26% of total payment volume.
One downside, however, was that eBay Marketplaces volume fell 4% on an FX neutral basis, compared with growth of 6% in the year-ago quarter, representing a total payment volume of 9.7% compared with 12.7% a year ago.
Earnings rose 37% in the quarter to 78 cents a share, beating consensus estimates of 68 cents.
Revenue rose 12% to $4.13 billion in the quarter.
PayPal also announced several key strategic initiatives during the quarter, including its $750 million investment in MercadoLibre, a Latin American e-commerce and payments firm.
PayPal entered an agreement with Instagram to use process payments in Instagram's new checkout experience and formed a partnership with JPMorgan as part of the bank's Instant Transfer consumer rollout, giving PayPal customers faster access to their funds.
Thad Peterson, senior analyst at the Aite Group, said Venmo was performing well and PayPal is fast becoming "the payment ingredient in major commerce initiatives," he told Mobile Payments Today. "Being the embedded payment platform is a very sticky place to be, and it's a great way to continue to scale the offering on the merchant side.".
Visa fiscal Q2 profitable
Visa Inc. reported net income rose 14% to $3 billion, or 17% to $1.31 a share, in the fiscal second-quarter as payments volume and processed transactions rose, while cross-border volume slowed in-line with company expectations.
Payment volume was up 8% from the year-ago period, while the company an 11% increase in transaction volume to 32.5 billion from a year ago.
Revenue rose 8% in the quarter to $5.5 billion.
"We remain focused on investing in multiple growth opportunities including strategies that both grow the overall pie for payments and funds transfer as well as enhance our capabilities to ensure we continue to be the preferred partner in payments," Al Kelly, CEO of Visa told security analysts on a conference call yesterday.
The company reaffirmed its revenue outlook for fiscal 2019, in the low double digits, while the company's expenses in the mid-to-high single digits after adjusting for special items from fiscal 2018.
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April 25, 2019
Shopify Inc., a multi-channel commerce platform for online retail, has launched a line of point-of-sale hardware that will "revolutionize the in-store retail experience for some of the world's fastest-growing brands with omnichannel capabilities, including contactless payments," according to a company press release.
The hardware includes the Shopify Tap & Chip Reader, Dock and Retail Stand, which allows customers to choose between scanning their contactless mobile apps or inserting their credit or debit cards. The reader also connects to Shopify POS, which is software from the firm that provides inventory management, secure payments and a consolidated backend that links directly with a merchant's online store, according to Shopify.
"We've helped merchants successfully build and grow their online stores for 14 years and now we're the best partner to help entrepreneurs capitalize on the huge opportunity of in-person selling," Craig Miller, chief product officer at Shopify, said in the announcement. "Digitally native brands want to build loyal audiences through retail locations, and we've designed the best products to help them achieve this success."
Shopify is also offering accessories, including a dock that allows the reader to be detached and used to checkout customers located in other parts of the store.
Topics: Mobile Payments, POS, Retail, Technology Providers
Companies: Shopify Inc.
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April 25, 2019
Lavu Inc., a point-of-sale and payments technology firm for bars and restaurants, has acquired MenuDrive, a branded mobile ordering platform for restaurants, according to a company pres release.
The Lavu acquisition of MenuDrive will help restaurant owners maintain control of their own mobile ordering and delivery service instead of relying on third-party services that require restaurant chains to give up a percentage of their food and beverage income, according to company officials.
"Lavu and MenuDrive share a single vision and goal which is to provide restaurant owners the online ordering technology they need to thrive," Saleem Khatri, chief executive of Lavu, said in the release. "Together the strength of our combined companies will enable our customers to achieve even higher profit margins and increased levels of customer satisfaction."
The merger will provide restaurants with advanced analytics, customized loyalty programs and the ability to offer branded online ordering, according to the company. As part of the analytics capability, restaurants will get detailed customer history, sales trends, product reports and other data.
Terms of the agreement were not disclosed.
Topics: Mobile Apps, Mobile Payments, Online Purchasing, Restaurants, Technology Providers
Companies: Lavu
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April 25, 2019
Visa Inc. entered an agreement with Fidelity National Information Services Inc. to allow the company's commercial financial institution clients to access Visa's B2B Connect platform, a distributed ledger system that allows large-ticket, cross-border payments to be completed within a matter of days, according to a company press release.
FIS is integrating its payments technology into Visa's B2B Connect, which will allow the two companies' mutual banking clients to send corporate client funds to and from other participating banks, removing the usual level of friction associated with these type of transactions. FIS has created a custom integration model, which will help reduce the need for clients to make upgrades to their existing systems, according to the release.
The companies are in the pilot phase and will officially launch the service within the quarter.
"FIS is excited to partner with Visa to enable financial institutions to connect to this groundbreaking new payments service," Raja Gopalakrishnan, international head of banking and payments for FIS Global Financial Solutions, said in the release." The combination of FIS's global customer base and leadership in commercial payments and Visa's extensive experience as a payments processing network, creates a strong partnership for adding value to the multinational commercial value chain."
Kevin Phalen, global head, Visa Business Solutions, said innovation in cross-border B2B payments was a development that is long overdue.
"Visa's core strategy is to help clients and partners drastically improve their customer's friction filled experiences," he said in the announcement.
Topics: Card Brands, Mobile Banking, Mobile Payments, Online Purchasing, Technology Providers, Transaction Processing
Companies: FIS Global, Visa
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April 24, 2019
Early Warning Services LLC, the network operator of Zelle, said that $39 billion was sent over the P2P payment service during the first quarter on 147 million transactions, representing a 54% increase in transaction values at and 72% gain in transaction volume, compared with the year-ago period.
"This past quarter, Zelle achieves several milestones towards our goal of national ubiquity," Lou Anne Alexander, group president, payment solutions at Early Warning Services, said in an announcement. "Our core processor partners have achieved tremendous results, signing more than 130 banks and credit unions in Q1."
During the first-quarter of 2018, the company reported $25 billion moving through Zelle on 85 million in transactions.
Alexander said the company also launched a marketing campaign focusing on everyday case uses for Zelle.
Topics: Bill Payment, Mobile Apps, Mobile Banking, Money Transfer / P2P, Trends / Statistics
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