PayPal, crypto and the continuing evolution of the super app

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In shaping the connected economy, there is room for cryptocurrencies, for digital wallets, and for consumers to use cards in the mix to make transactions.

As it stands, payment apps – Venmo among them – are a bit of a cryptocurrency ramp, where consumers use fiat to buy bitcoin or one of its crypto brethren, hold the crypto then sells it, converting it back into fiat, which is then used in mainstream commerce.

Other apps also give crypto an entry point – Robinhood comes to mind. And in the fight for priority and top of the digital wallet, investing / trading apps can compete with payment apps for first-time (and more regular) use.

PayPal’s results Monday evening (November 8) show the new PayPal app has been extended to global coverage. As CEO Dan Schulman said, the app has resulted in a 15% increase in the number of consumers transacting with crypto. Year over year, Venmo’s volume jumped 36% to $ 60 billion, the company said in additional documents released alongside its earnings. He also said Venmo is on track to see an execution rate of $ 240 billion in total payment volumes – the same as the entire U.S. PayPal franchise in 2016.

Schulman offered more details on the cryptocurrencies during the PayPal analyst call on Monday. “Our strongest week ever for first-time users was last week,” he noted. “And we’ve had a good week for first-time user growth on this. But it’s clear that the new app is boosting both discovery and conversion on the crypto side. “

While PayPal hasn’t disclosed other specific crypto-related details, the company is carving out a niche where crypto fits into the ecosystem it connects. Venmo’s Crypto Cash Back feature, for example, uses cash back earned on daily expenses to automatically purchase crypto, linking it to wallets and trading in general.

PYMNTS’s own research, done in collaboration with BitPay, shows that up to 18% of the adult population – some 46 million consumers – are likely to use cryptocurrency to make a purchase.

See also: PYMNTS BitPay Study: How Consumers Want to Use Crypto to Buy and Pay in 2021 and Beyond

As Schulman said on the call, “It’s pretty clear that consumers and merchants prefer a more connected digital lifestyle that encompasses financial services, shopping, payments and commerce. Our market research and that of others strongly support the vision of a more connected economy.

There is also a convergence happening, where a range of different activities fall under the “umbrella” of the super app. Beyond PayPal, there is Robinhood. While privacy concerns are at the forefront after the company exposed a breach that compromised the email addresses and data of millions of users, the visible focus has been on commerce and investing. on the Robinhood app and online platform.

Also Read: Hackers Steal Millions of Robinhood Customer Emails and Data

But like PayPal, Robinhood has diversified deeper into cryptocurrencies. Robinhood said there is a waiting list – a million people – for its cryptocurrency wallet. The wallet will allow customers to combine their digital coins into one account, allowing them to trade, send and receive cryptocurrencies to and from other wallet addresses, Robinhood said.

Related News: Robinhood CEO Says Over 1 Million Users Want To Try His Crypto Wallet

But the lines are blurring. Robinhood has implemented a debit card and other cash management tools, indicating a continuum between investing, trading and then using these activities (and the money available in the accounts) to fund. daily transactions. Currently, crypto trading accounts for a significant portion of Robinhood’s revenue – $ 51 million, or 19% of the $ 267 million reported in transaction income.

It’s likely that PayPal users who are fairly comfortable with e-commerce are also familiar with Robinhood. PayPal may have a head start at this time, given the privacy concerns of some users following the Robinhood violation. But where customers ultimately choose to go (perhaps use debit cards or buy and hold crypto) can stimulate a hotbed of competition. At the end of the most recent quarter, Robinhood had 22.4 million cumulative net funded accounts, while the latest data from PayPal shows 416 million.

Scale matters, of course, in building an ecosystem – especially one that wants to get users to adopt more activities and cement their loyalty.

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NEW PYMNTS DATA: 2021 HOLIDAY SHOPPING PERSPECTIVES

By the way: It’s almost time for the holiday shopping season, and nearly 90% of U.S. consumers plan to do at least some of their purchases online – 13% more than in 2020. On the 2021 Holiday Shopping Outlook, PYMNTS surveyed over 3,600 consumers. to find out what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.

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