What is the use/business model of Paypal (NASDAQ:PYPL)? - Seedly


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Asked by Kelly Trinh

Asked on 24 Nov 2019

What is the use/business model of Paypal (NASDAQ:PYPL)?

Its the oldest of all the tech payment firms - but when I look at what they offer it seems nothing that I can't get elsewhere (card payments any merchant that takes PP can take V/MC and remittances others seem way cheaper) --- yeh it's market cap is huge, what is their special sauce ?


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Junus Eu
Junus Eu
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Top Contributor (Dec)

Level 9. God of Wisdom
Answered on 03 Dec 2019

Go straight to the source - their 2018 Annual Report: https://investor.paypal-corp.com/static-files/a3a709e0-7c03-4912-b0fe-0872e4fed100

First up - their metrics:

A high point in 2018 was our net new active number, which reached a record of 39 million net new active accounts for the year. We exited 2018 with 267 million active accounts on our platform, with approximately 246 million consumers shopping at more than 21 million merchant accounts. We are helping all of our customers join the digital economy, and we are targeting more than 300 million active accounts on our platform by the end of this year. Proxy Statement Importantly, the newest cohorts of users are exhibiting higher levels of engagement, which is an encouraging sign. Overall, we realized nearly 37 payment transactions per active account in 2018. We processed nearly 10 billion transactions in the year, and our overall payment volume grew 26% on a currency-neutral basis to $578 billion.

2018 financial performance:

Revenue for 2018 exceeded $15.4 billion, growing 18% on both a spot basis and FX-neutral basis.1 In the fourth quarter, we marked the first time in our history that we exceeded $4 billion of revenue in a single quarter. GAAP earnings per share (EPS) in the year grew 16% to $1.71, and non-GAAP EPS grew 28% to $2.42.2 We returned more than $3.5 billion to stockholders during the year through stock repurchases.

With the slew of acquisitions they have done, including Verisign and Braintree, what they have is reach and the network effect. ​​​



PayPal Buyer Protection is one of them - additional security to ensure we get what we pay for.