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The top brass at PayPal Holdings Inc. stressed early Tuesday that the company is looking to strong trends in buy now, pay later and Pay with Venmo for growth, accompanied by a significant dose of agentic commerce.
“We see a massive shift to digital wallets and to BNPL and toward agentic commerce. We’re well-positioned in all three of them,” said PayPal’s chief executive, Alex Chriss.
The payments giant is already seeing strong growth in BNPL, leading Chriss to say the product should generate approximately $40 billion in volume this year, up more than 20% from 2024. BNPL, which allows consumers at the point of sale or online to divide payments into a series of installments paid over time, took off during the pandemic and has been adopted by a wide range of payments companies. That competition, however, doesn’t confound PayPal, according to Chriss.
“The shift toward BNPL is a fundamental change in how consumers want to pay and we’re positioned to take advantage,” Chriss said during a conference call with analysts to discuss his company’s third-quarter results. “People love the product.” As a result, he added, “We are building the future of flexible payments.” Statistics gathered by Capital One Shopping project the number of U.S. users will climb 21% to 105 million in 2028 from 86.5 million last year. Chriss is betting PayPal can beat that growth rate. “I’m as impatient as anyone. I want to see this go faster,” he said. PayPal launched its BNPL product, called Pay in 4, in 2020.
At the same time, he sees greater potential in Venmo, which started out as a peer-to-peer payments service to which PayPal has added commercial payments capability. “Venmo a couple of years ago was an incredible [person to person] product, but we weren’t meeting customers where they were. You couldn’t use it to pay for a meal,” Chriss said. Now, with Pay with Venmo, things have changed as a result of merchants’ push to reach the younger demographic that tends to use the service. “Venmo is the best way to get that access,” said Chriss.
Venmo volume from P2P as well as commercial payments generated 20% revenue growth in the quarter, year-over-year, positioning the product squarely in Chriss’s sights. The product is expected to yield $1.7 billion in revenue this year. “Venmo a couple of years ago was an incredible [P2P] product in a strong starting position, but we weren’t meeting customer where they were,” Chriss said. “You couldn’t use it to pay for a need. Merchants really want access to this demographic. Venmo is the best way to get that access.”
Meanwhile, PayPal has upped the ante on agentic commerce, a move that includes a venture with Google Cloud to make the technology work for merchants and consumers. Early Tuesday, the company announced it will launch a service called agent ready, aimed at allowing PayPal-accepting merchants to take payments via connections enabled through AI. The move comes as payments players have explored the potential for commerce initiated by intelligent bits of code acting on behalf of, and controlled by, consumers. “We want to be agentic,” said Chriss. “It’s an evolution of our strategy.”
For the quarter, PayPal generated $458.1 billion in payment volume, up 8% year-over-year, good for $8.42 billion in revenue, up 7%. Active accounts grew 1% to 438 million, while the number of payment transactions rose 7% to 6.33 billion. Operating income was $1.57 billion, a 6% rise.
