PayPal continues to boost parent company eBay.
The San Jose, Calif.-based auction giant had a “challenging quarter,” due to the much-publicized security breaches earlier this year, but still beat earnings estimates, the company reported last night.
Its PayPal unit, however, reported several milestones. PayPal was reported to pass 150 million users this quarter, a year-over-year growth rate of 15%. PayPal’s mobile payment volume outside eBay now exceeds the volume within eBay. PayPal is also growing internationally, with the launch of its first-ever global marketing campaign in the spring.
PayPal’s fast growth, eBay CEO John Donahoe reported, was exceeded by the growth of its Braintree unit. (Braintree was acquired by PayPal last September.)
Donahoe is serving as PayPal interim president in the wake of David Marcus’s recent departure, which Donahoe described on the call yesterday as “unexpected.” Braintree CEO Bill Ready is widely expected to eventually assume the Marcus’s role, and Braintree’s growing importance within eBay should only heighten those expectations.
Regarding PayPal’s earnings, Donahoe said, “PayPal had a great quarter. Merchant Services TPV grew 33% in Q2, accelerating for this fifth consecutive quarter. Revenue was up 20% on an FX neutral basis.”
PayPal is also renewing its prepaid card agreement with GE Capital, and says it will increase its loan facility in 2016 to around $1 billion. Donahoe:
This increases PayPal’s flexibility to expand its credit offerings to consumers and merchants, while improving its ability to manage transaction expense and reinvest back into the business to accelerate payment volume. … For example, PayPal is now leveraging eBay Inc.’s wide data to extend credits to small merchants to help them grow. This program is now loaning $1 million a day to our small business merchants giving them access to much needed capital.
PayPal’s use in cross-border payments is also growing. 79% of international shoppers identified PayPal as their preferred payment method when making cross-border purchases, according to eBay. The company is focused on helping merchants make cross-border sales, according to Donahoe.
PayPal Beacon was reported to still be in a limited “test and learn” phase.
Donahoe said that, in the wake of the Carl Icahn push earlier this year to spin off PayPal from eBay, he remains “open-minded” to the possibility, while having no current plans to carry out such a move.