Global payment giant PayPal is preparing to expand its cryptocurrency offerings.
In April of this year, PayPal introduced crypto services on its mobile payment service Venmo, which enabled over 70 million additional users to buy and sell four cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
During PayPal’s Q2 earnings call on Wednesday, CEO Dan Schulman shares how Venmo has fueled PayPal’s explosive Q2 growth and how he expects crypto adoption to continue growing on Venmo.
“Revenue growth accelerated to almost 70% in Q2, our highest growth rate in the past year, fueled by Venmo’s product diversification strategy. More than 500,000 customers have established new business profiles on Venmo with more than 300,000 created in Q2 alone.
Pay with Venmo revenues grew by 183% year-over-year. We’re also seeing strong adoption and trading of crypto on Venmo and this quarter we expanded the Venmo value proposition to allow merchants and consumers to pay for goods and services and receive buyer and seller protections for commerce transactions. This has been a very successful feature on PayPal’s P2P (peer-to-peer) services and we expect it will be widely adopted on Venmo.”
Venmo introduced support for Bitcoin, Ethereum, Litecoin and Bitcoin Cash earlier this year.
When asked about the company’s future plans to engage with the cryptocurrency ecosystem, Schulman explores the company’s new crypto capabilities and the possibility of expanding crypto services for clients in the UK as soon as August.
“Well, we continue to be really pleased with the momentum we’re seeing on crypto… We’re right in the middle of some open banking integration, which will increase the ability to fully integrate into ACH (automated clearing house) and do faster payments. We’re going to launch, hopefully, maybe even next month in the UK, open up trading there. We’re working right now on transfers to third-party wallets, and we really want to make sure that we create a very seamless process for taxes and tax reporting.”
While these new features are interesting, PayPal’s blockchain and digital currency strategy is much broader, according to Schulman.
“We are clearly thinking about what the next generation of the financial system looks like [and] how we can help shape that. We are working with regulatory agencies, central banks across the world. The number of countries that are looking at CBDCs, central-bank-issued digital currencies, is increasing rapidly. You’re at like 40 countries, like six months, a year ago – you’re almost up to 100 countries looking at it right now.
And clearly, there is an opportunity to think about our new infrastructure that can more efficiently read that to be a lower cost, do transactions, and also get money to people much faster than it happens today.
…It needs to be instantaneous, and there is a lot of desire by governments to really think – how can you create a more efficient system using new technology to bring in more citizens, more under-banked, underserved citizens into the financial system? Because they disproportionately pay a higher take rate than those who are fully banked or [at] higher income levels.”
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