In its Q4 2020 earnings call today, reported that cryptocurrency purchases helped keep its users on the platform.
In its investor update, the company wrote, “Customers who purchase cryptocurrency have been logging into PayPal at a rate 2x their login frequency prior to purchasing cryptocurrency.”
Though PayPal CEO Dan Schulman didn’t go into specifics in terms of earnings, he did say that “the volume of crypto traded on our platform greatly exceeded our expectations.”
That’s enough for the company to push forward.
“We all know the current financial system is antiquated,” he said, before outlining a future in which all people—not just the affluent—had access to financial services. To help meet this goal, he promised the company was “significantly investing in our new crypto, blockchain, and digital currencies business unit in order to help shape this more inclusive future.”
Overall, PayPal recorded $277 billion in total payment volume and $6.1 billion in revenue, its strongest quarter to date, though the figures for cryptocurrencies are calculated separately.
In October 2020, PayPal, the online payments company used by over 325 million people, announced that its users would soon be able to buy , , , and from their account. The service subsequently debuted in November.
Thus far, the payments network only facilitates buying, holding, and selling those cryptocurrencies. It plans to allow users to use the cryptocurrencies in their PayPal accounts for purchases at 29 million merchants later this year. But even without the functionality, the integration has already paid dividends for PayPal, as the company pockets a percentage of every cryptocurrency transaction made through the platform.
And there’s been quite a bit to pocket, with retail demand for crypto increasing. PayPal’s entry into the market, along with institutional investments from MicroStrategy, payments competitor Square, and others have helped drive the price up and peak interest among the general population.
Since PayPal’s announcement on October 21, the price of Bitcoin has tripled from $12,221 to over $37,000. In the same timespan, Ethereum has quadrupled from just under $400 to just over $1600; Bitcoin Cash has jumped from $260 to $440; and Litecoin has quietly risen from $50 to over $150.
That’s not the only thing that’s risen. PayPal stock closed at $249 yesterday. On October 20, the day before announcing the crypto integrations, it closed at $202.
Today’s earnings call was the first chance for investors and the general public to hear real numbers about the company’s cryptocurrency offerings, though details were sparse.
ItBit, the exchange PayPal uses for crypto purchases, has watched trading volumes rise in the past three months. Prior to the PayPal announcement, the exchange hadn’t logged any days above $5 million in volume. It set a new record with $242 million on January 10. It’s impossible to know how much of that growth in volume was tied to PayPal.
Update: This article has been expanded to provide additional context.
News Source from Decrypt.co