By Jeff Domansky, Feb 4, 2021
Amazon’s not the only company to release record-high Q4 financial results. PayPal just ran the table with impressive Q4 and 2020 financials during a year when the pandemic hit many other businesses hard.
The company nearly doubled the number of its net new accounts from 37.3 million in 2019 to 72.7 million new accounts, an increase of 95%. Total payment volume hit a record high of $936 billion in 2020 (+31%).
“PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic. In this historic year, we released more products than ever before and have dramatically scaled our acceptance worldwide, giving our 377 million consumer and merchant accounts even more reasons to use our platform,” said President and CEO Dan Schulman.
A record year across-the-board
Here’s a quick summary of the impressive 2020 financial results for the global payment leader:
- total payment volume reached $936 billion, up 31% over 2019
- net revenue was $21.45 billion (+22%), compared to $17.77 billion in 2019
- earnings per share of $3.54 (+71%)
- operating cash flow was up 44%, reaching $5.85 billion compared to $4.07 billion year-over-year.
2020 operating highlights
Operating results for the year were equally impressive.
PayPal added 72.7 million net new accounts, a 95% increase over the previous year, finishing 2020 with 377 million accounts (+29%). The number of merchant accounts totaled 29 million by year-end.
The company processed more than 15.4 billion payment transactions, increasing 25% over the previous year. Merchant services volume increased 33%, and subsidiary Venmo handled more than $159 billion in total purchase volume (+ 56%).
Strategic investments and new products paid off
Like most companies in the financial world, PayPal continues to invest heavily in new technology, digital wallet product launches, and strategic initiatives.
PayPal’s money transfer and P2P service Xoom introduced secure money transfers direct to mobile wallets in Nov in 12 African markets. With a focus on the underbanked, it has plans to add new markets in 2021. Xoom was acquired in Nov 2015 for $1.09 billion.
PayPal launched QR code payments in iZettle’s point of sale app in Dec 2020, allowing UK merchants to accept safe and secure touch-free payments from customers. Contactless payments across its network continued to grow as consumers avoided cash during the pandemic. It acquired Swedish mobile payments company iZettle for $2.2 billion in May 2018.
In May, PayPal introduced QR code checkouts. US drugstore retailer CVS Pharmacy added contactless PayPal contactless payment and Venmo QR codes at more than 8,200 locations.
More than 600,000 merchants now accept PayPal and Venmo QR codes. PayPal acquired Venmo in 2013 as part of its purchase of previous owner Braintree.
What’s ahead for PayPal?
PayPal is optimistic about 2021, projecting revenue of $25.5 billion, growing as much as 19% over this year’s record.
“2020 was a pivotal year for PayPal and the broader payments ecosystem. We have just completed the strongest year in our history and have entered 2021 energized by a greater sense of purpose and ready to build on our momentum,” said CFO and EVP, Global Customer Operations, John Rainey.
PayPal expects total purchase volume to grow by as much as 25% or more. Most important in terms of growth, the company expects to add as many as 50 million net new accounts in the 2021 fiscal year.
This sets PayPal up for another potential big year near the top of the global digital payments industry leaderboard. That upside will only be limited by the lingering effects of COVID-19, the impact of US and other foreign pandemic relief programs, and the continuing pace of adoption of digital payments by both merchants and consumers.
You can read PayPal’s detailed Q4 and 2020 fiscal year financials here.
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