PayPal have just reported a healthy increase in revenue for the third quarter 2016: investment analysts were expecting the company to report quarterly revenue of $2.65 billion, but the company posted $2.67 billion, an increase of 18%. This small increase in revenue did not materially improve the earnings per share, which came in at an as-expected 35 cents. Although PayPal posted slightly higher revenue figures than expected, the company reported a slightly lower total payment volume figure – that being the value of total transactions on its platform – of $87 billion, rather than the $88.3 billion the market was expecting. Following these figures, PayPal updated its projected full year revenue: it is now expected to be between $10.78 billion to $10.85 billion. Furthermore, the company announced it is to be pushing the PayPal brand and Chief Executive Officer, Dan Schulman, said this in the accompanying statement: "We are further expanding the ubiquity and value of the PayPal brand and moving deliberately towards achieving our vision of becoming an everyday, essential financial service for people around the world."
Over the years, PayPal has been a major beneficiary of the rise in online e-commerce. Today the company has almost 200 million active accounts and is a leader in online payments. PayPal's easy to use, alternative way of keeping customer bank account details secure has been appreciated by many for years now. The company separated from eBay last year and has applied renewed focus to its mobile business as well as shoring up how it works with credit cards, following pressure from the consumer finance industry. PayPal has recently changed how it works with the Visa and MasterCard businesses, which are now compatible with the core PayPal service rather than directing customers to use the standard link with bank account payments. This change will introduce credit card fees into PayPal's business model, but because using credit cards will be easier, the company is hoping that an increase in transactions will more than offset this.
Two other sub-brands of PayPal have also been successful, these being Braintree and Venmo. Braintree is the payment infrastructure that sits behind transactions for Uber, Airbnb, Pinterest and other similar, well known services – essentially, whenever somebody pays for an Uber, PayPal makes a tiny amount on this. Venmo is a consumer facing service – it's considered to be the electronic equivalent of an "IOU" and helps splitting bills and similar. Venmo is free to use but PayPal is cooperating with businesses and will be monetizing the service going forwards. Following the announcement, PayPal's stock price was volatile in after-hours trading, first falling and then recovering.