PayPal Q3 results: Slow but steady growth
PayPal is one of the most successful online payment services in the world. Especially in many European countries, in the U.S., and in Australia, PayPal is the leading online payment method, used by an overwhelming majority of both consumers and online stores. Earlier this month, the pioneer of eWallets has released their third quarter 2022 results, delivering solid financial results, which are in line with the slow but steady growth trend of the past years:
The total payment volume which is processed via PayPal’s online payment service is “traditionally” volatile from quarter to quarter. Q3 was not the strongest 2022 quarter until now – total payment volume is down US$3 billion from Q2 2022. Yet compared on a year-on-year basis with Q3 2021, total payment volume increased by 9%. The same is true when comparing the second quarters of 2022 and 2021. Both had seen higher payment volumes than the respective third quarters, yet year-on-year growth between 2022 and 2021 was also 9%. Will Q4 follow the same trend? At least in revenue terms, PayPal expects a plus for the fourth quarter.
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When taking a look at account details, it turns out that it is especially the development of transactions per account over the years which is supposedly responsible for overall rising payment volumes. The number of transactions per account has constantly been growing faster than the total number of accounts since Q2 2021. While the total number of active accounts increased by 4% between Q3 2021 and Q3 2022, the number of transactions per account rose to 50.1 on a trailing twelve-month basis. This is a 13% increase in the transactions per account compared to Q3 2022. A look at the development of the actual amount that is transferred per transaction backs the assumption that the rising number of transactions per account is mainly responsible for PayPal’s overall transaction volume increase: The average volume per transaction declined from US$17.7 in Q2 2021 to US$15.6 in Q3 2022. Many small transactions lead to an overall transaction volume increase.
Source: ecommerceDB
