The main payment processing company in the United States, PayPal, reported a significant increase in revenue in the last quarter of 2020 after the integration of cryptocurrency trading.
In the report for the fourth quarter of 2020, PayPal revealed that the financial results went well beyond its expectations. The company noted that it was its strongest fiscal year, with high volume of payments and new accounts, further strengthening its reach.
PayPal recorded a 16 million increase in the number of active accounts on its platform in the fourth quarter of 2020 alone. For fiscal 2020, the company added 72.7 million new net active accounts, bringing its total active accounts up to 377 million.
This increase occurred shortly after the company introduced cryptocurrency trading on its platform. On October 21, 2020, PayPal confirmed its entry into the market after receiving a conditional license from the New York State Department of Financial Services (NYDFS), which allows U.S. users of its Venmo service to trade cryptocurrencies.
PayPal crypto users are very active
PayPal said activity on its network increased after it allowed customers to buy, sell and store cryptocurrencies like Bitcoin, Ethereum, Litecoin and Bitcoin Cash using their wallets.
Consequently, customers who engaged in cryptocurrency trading began to spend more than twice the time they spent before using the service.
PayPal revenue per quarter. Source: Coindesk.
PayPal noted that its total payment volume in the last three months of 2020 increased 39% to $ 277 billion, exceeding the company's expectations and analysts' forecast of $ 267 billion for the fourth quarter of 2020.
Cryptocurrencies as a form of payment
Speaking about the company's cryptocurrency venture in a call with analysts, PayPal CEO Dan Schulman said the company has formulated a comprehensive product technique on crypto, blockchain technology and digital currencies in general.
He noted that PayPal is "investing significantly" in its new crypto and blockchain business unit. The company plans to help shape the role of cryptocurrencies in payments to consumers worldwide.
“We saw an exceptional response from our crypto launch, even with high initial expectations, the volume of cryptocurrencies traded on our platform has far exceeded our projections. We are excited about this initial success, allowing customers to use their crypto balance as a source financing whenever they purchase from our 29 million merchants. We anticipate that the implementation of this capacity will begin at the end of this quarter and we expect to launch our first international market in the coming months. These initial steps are just the beginning of an extensive roadmap around cryptocurrencies, blockchain and digital currencies. ”
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