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Tuesday's Market Minute: Checking Out With PayPal

Tuesday's Market Minute: Checking Out With PayPal

PayPal Holdings Inc (NASDAQ: PYPL) reported earnings after the close yesterday, beating on the top and bottom line. The company’s guidance predicts EPS growth of 27%-28% and revenue growth of 20%-21% in 2020. It also said Venmo’s Total Payment Volume was $44 billion, up 61%. Consumers have turned to online payments and e-commerce as the pandemic limits shopping in person and with cash, and that explains some of the growth PayPal has seen. However, consumers have plenty of choices: credit cards, CashApp, Zelle, and others all compete in the space.

So, what’s PayPal doing to gain this kind of growth?

It’s become ubiquitous at the online check-out counter. Everywhere from Etsy Inc (NASDAQ: ETSY), Domino’s Pizza, Inc. (NYSE: DPZ),, Inc. (NASDAQ: AMZN), Target Corporation (NYSE: TGT), and so on allow users to use PayPal instead of a credit or debit card at checkout. Facebook, Inc.’s (NASDAQ: FB) Messenger even has an option for users to pay each other using either a debit card or PayPal. No other payment app has this sort of reach, and the company advertises secure payments for consumers who might be nervous about typing in card numbers. The question is whether it can keep its lead in this competitive field and continue a strong growth rate.

Photo by Mika Baumeister on Unsplash


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