PayPal is making 2 tweaks that'll transform it into a force to be reckoned with (PYPL)
- PayPal is expanding its partnership with Google, which should boost its competitive position.
- The company, which has long struggled with making money off of Venmo, revealed its monetization efforts are working.
- Watch PayPal trade in real-time here.
PayPal is racing ahead to try and gain a competitive edge against its fintech peers.
The payments company held its annual analyst day Thursday and revealed its plan to work more closely with Google and roll out a dynamic payment button. It also updated investors on the monetization of Venmo, which could be a large revenue-growth opportunity and could contribute pretty significantly to earnings.
"We see the dynamic checkout button and new Google integration as enhancing PYPL’s competitive position," Jefferies analyst Ramsey El-Assal wrote in a note to clients.
Given PayPal's partnerships act as a key long-term growth driver, expanding its relationship with Google will provide a big boost according to El-Assal. The two companies will work together to set up transaction services across all Google payments. Customers will onboard once and gain access to payment services in various places such as Google Pay and peer-to-peer, in email, in-app and in-browser.
PayPal is leveraging back-end analytics to create one-touch payment buttons in real time. The service will provide customers with fast checkouts, cutting down the time to type in a password, billing, and shipping information. The Google partnership should quell any investor concerns about W3C — browser-based payments compliance— and open up the door to other similar partnerships, he said.
PayPal also gave investors the update on its plan to monetizing Venmo. The service is widely popular with transaction volume growth up more than 80% when comparing this year's first quarter to last year's, but the company had previously brought in little revenue through the platform.
Now, it's monetization plan seems to be taking effect. The company reported that as of May 2018, 11% of active monthly Venmo users have used some type of monetized transaction compared to roughly 0% at the beginning of the year. Venmo peer-to-peer payments not linked to any credit cards remain free, but PayPal has been charging for instant deposit, cobranding offers, and "Pay with Venmo," which allows customers to shop using Venmo.
Paypal is up almost 12% this year.
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