PayPal Shares Soar After Venmo App’s Surprise Market Boost

Wall Street analysts continue to believe that Amazon’s stocks will continue to soar based on how well they are actually doing. To their surprise, there’s an underdog that seem to be making its way to the top. The shares of the leading online payment company in the United States managed to rise by 9 percent, all thanks to its Venmo app. PayPal shares soared last weekend which is seem to be a surprise since it came from the Venmo app, which they bought on 2012. 

PayPal CEO sees Venmo’s “tipping point” for finally making a huge sum for the company

PayPal’s Shares Jumps

Analysts definitely did not expect that PayPal would be able to hit $86 as well as shares over 26 percent every year. The online payment company reported their third-quarter earnings as well as their revenue last Thursday. It turns out that Wall Street expected PayPal to have around 58 cents per share and only over $3.68 on their revenue. PayPal’s revenue actually grew by 78 percent overall during their third quarter, which then led to them having around $17 billion.

This was all because of PayPal’s Venmo app, which was never really seen as something that would contribute to the shares of the company. The $17 billion from its total in the third quarter is still considered to be a huge deal and will be seen as an encouragement on their part, this is all according to the chief executive officer of PayPal, Dan Schulman, when he was talking about PayPal’s $143 billion in volume. 

He also said that they see it as the “tipping point” since Venmo finally managed to find its way when it comes to making money for PayPal. Since they have been acquired years ago, they have continued to struggle to make money for the online payment service. This then led to Wall Street analysts constantly watching out but when Venmo did make it, they were all astonished. Schulman said that he is indeed incredibly pleased with how the overall momentum of Venmo is going, since a huge portion of Venmo users have finally participated to their “monetizable action”.

When asked what he thought may be the reason for the rise, the PayPal CEO simply said that it is when the monthly active users on their “Pay with Venmo” option from August to September increased massively.

This includes the 300 percent jump on the usage from Uber and Uber Eats customers as well as food deliver companies working with Venmo just like Grubhub, Eat24 and more. Although the company did not give exact statistics, PayPal said that partnerships with other brands have been growing.

More From Venmo

Venmo is actually a PayPal owned app service that allows the user to easily buy items that splits checks even if the user does not have any credit card. People can basically send money to their family and friends without having to get checks or cash.

Technically, it is somewhat has the same services as PayPal but they target different users. Paypal officially acquired Venmo back in 2012 for $800 million and it was actually a part of the payment of Braintree, which is a payment processing startup. PayPal is basically the digital check for users whereas Venmo is used as a digital wallet despite all of its similarities with PayPal. Venmo targets young adults when it comes to sending money to friends and family while PayPal targets small businesses. 

What experts think that definitely gave Venmo the edge this third-quarter, is there physical debit card that is known as Venmo card. This new card was just released last summer and it could be linked into a Venmo account. It is known to be a kind of feature that PayPal themselves does not have but the company believes its convenience helped Venmo’s growth. People would want to have something despite just their mobile phones when it comes to online payments, which is why the Venmo card was known to be one of the first physical cards from a digital app. 

Venmo finally found its rhythm in the industry as it helped with Paypal’s third-quarter growth

It is believed that with this massive improvement from Venmo, more and more investors are now looking into it instead of thinking of it as PayPal’s not-so-great mini me. Just like PayPal, it is a free app that is available for both iOS and Android users.