PayPal rides digital adoption wave with user uptick and product growth plans

PayPal reported third quarter earnings this week, in which it reported strong user growth and future plans for its digital financial product suite.

Why should we care?
For PayPal, which reported a 32% jump in daily active accounts year-over-year, the digital adoption shift during the pandemic bolstered continued activity. The company also reported an increase in the number of merchants using PayPal: 28 million merchants are on its platform, and the company added 1.5 million new merchants in the third quarter, over two times its pre-COVID rate. CEO Dan Shulman stopped short of using the term “challenger bank,” but the company’s future product plans hint at aggressively taking on digital banks. Shulman said both the Venmo and PayPal apps will undergo an upgrade over the next year, evolving toward a “comprehensive set of services and tools to manage [users’] financial lives,” including direct deposit and check cashing, budget and savings tools, bill pay, investment alternatives, including crypto, subscription management, and “buy now, pay later” capabilities.