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13th May 2022

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PayPal Had Another Record Quarter. Its CFO Says It Won't Be the Last.

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John Rainey, chief financial officer of PayPal.

David Paul Morris/Bloomberg


Holdings just reported its strongest first-quarter results in its history. Its CFO doesn’t see the digital payments company slowing down.

Late Wednesday, PayPal (ticker: PYPL) reported another quarter of blockbuster earnings, while raising its guidance for total payment volume and new active users for the full year.

That’s good news for investors seeking evidence that the shift to digital wallets won’t end with the pandemic. Chief Financial Officer
John Rainey
spoke with Barron’s after the results, noting that the company is seeing encouraging trends across the board.

He cites a recent


(MA) survey, which found that 71% of consumers expect to use less cash going forward, a figure that dovetails with what PayPal is seeing in its own business. “A lot of these digital-first experiences are going to persist, and so this is really speaking to consumers’ willingness to use other forms of currency besides cash.”

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Rainey has discussed the ability of digital payments to outlast the pandemic with Barron’s in the past, and points to how dominant they are in other countries like China—where they’re widely accepted everywhere from bus stations to street vendors.

“We’re on the threshold of a sea change in the U.S. and other markets, where people are moving toward contactless payments,” he says. The company noted that demand for PayPal and Venmo QR codes and offline payments is stronger than ever, with a new merchant signing up every 28 seconds.

That trend, of course, got a boost from the coronavirus, especially in the early days of the crisis when people were concerned about transmission through contaminated surfaces. Yet while the virus may have been the impetus for some consumers to try out digital payments, convenience has become the reason the habit has stuck.

“There is nothing about the experience of paying with a credit card that’s better than paying with a phone,” Rainey said. “It will take some time before it’s ubiquitous, but we’re at the beginning of a journey and we’re not going back.”

That’s clear from data in areas that have largely reopened from the pandemic: Paypal’s single highest growth business is still food and groceries, which was up more than 100% in the first quarter, even as people can return to stores.

“People have long said that paying with a phone has been a solution in search of a problem; it’s hard to change consumer behavior, but you tend to see it around these black swan events, like the pandemic,” Rainey says. He notes that the same Mastercard survey found that 93% of shoppers are considering some form of emerging payments. “I’m not saying that in a quarter or two everyone will be paying with a phone, but it shows they’re thinking differently about how they [make] transactions.”

The simplicity and security of digital payments will keep consumers coming back, especially as the company expands its reach, Rainey says. Going forward, he aims for PayPal’s digital wallet to act much as a physical one has in the past. Just as consumers once carried their ID, credit and debit cards, and cash, PayPal is investing in new services—from buy now-pay later to cryptocurrency—to create a “suite of experiences for our customers to use us in many different ways.”

Write to Teresa Rivas at

2021-05-06 17:12:00

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