What PayPal is including in its super app

PayPal has finished coding its so-called super app, but will still be adding core services long after the product launches.

PayPal isn’t coming on too strong with the app’s imminent launch. The first services to be added are a savings account, bill payment, cryptocurrency management and a new two-way messaging feature for person-to-person payments.

Many of the biggest services slated for the app are successful individually — a loyalty integration with CVS has exceeded expectations, and the “Pay in 4” installment lending product is also successful, the company says — but the challenge will be whether bundling them into a super app improves their visibility or dilutes it.

“It’s going to be a multi-year journey for us,” Dan Schulman, PayPal’s president and CEO, told analysts during an earnings call with analysts Wednesday afternoon.

“The way I’m looking at success with the super app is what kind of engagement levels do we get, what’s happening to our average revenue per active account,” Schulman said.

The development of a super app is “going to be a multi-year journey for us,” Dan Schulman, PayPal’s president and CEO.


Additional super app features slated to roll out in the next several quarters include personalized, AI-powered shopping offers, the ability to manage PayPal’s buy now/pay later installment loans within the app and two-days-early access to direct deposits, Schulman said.

The troves of data PayPal may amass about its users’ broad financial habits through its super app clearly will accelerate the San Jose, California-based company’s vision of becoming an omnichannel operator serving users seamlessly online and in stores.

“Every merchant, whether it’s small, midsize or large, is envisioning a seamless omnichannel feature, where physical and online kind of blur together that they start to use that to digitally interact with their customers to tie in their loyalty programs, customize deals and offers to individual consumers,” Schulman said.

PayPal is still in talks with large merchants about how to integrate their loyalty programs and coupons into its app, following the example of the successful CVS partnership, he said.

Meanwhile, the “Pay in 4” BNPL service PayPal introduced last year is surging as a standalone product, with 80% of installment loans funded by debit cards, he said.

“We continue to think PayPal is one of the best positioned apps to become a super app for financial services,” analysts at New York-based Piper Sandler said in a note to investors.

Pay in 4 generated $1.5 billion in payment volume during the quarter ended June 30, up 50% from the first quarter of this year, with 7 million consumers and 650,000 merchants participating, Schulman said. PayPal offers Pay in 4 to merchants at no extra cost.

PayPal next month will expand its cryptocurrency account management services to users in the U.K. and in U.S. In coming months, the company plans to integrate crypto wallets with ACH in the U.S. so consumers can more easily move and spend crypto funds, Schulman said.

Blockchain development in global markets is also on the agenda, as the company works with regulatory agencies and central banks around the world to explore opportunities with central bank digital currency, Schulman said.

“We are clearly thinking about what the next generation of financial systems looks like and we’re working with regulatory agencies and central banks across the world,” he said.

PayPal’s revenue during the second quarter rose 19% over the same quarter a year ago to $6.24 billion, while net profit fell 23% during the same period to $1.18 billion, which PayPal attributed to fallout from its long separation from eBay announced six years ago.

In 2015 eBay accounted for 26% of PayPal’s revenues and its revenue contribution is now in the single digits. By the end of this year eBay’s drag on PayPal’s growth should end, Schulman said.

PayPal added 11.4 net new accounts during the quarter and 1.5 million new merchant accounts, bringing its total merchant base to 32 million.

Lower profits and slightly weaker revenue growth than expected caused PayPal’s stock to fall about 8% in late-afternoon trading on Wednesday.

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