PayPal CEO points to crypto as key growth engine, plans to launch new digital wallet

PayPal shares surged 5.5% after the company’s first-quarter earnings were revealed to be stronger than expected. CEO Dan Schulman pointed out that cryptocurrencies brought great results for the payments company. 

Digital assets performed strongly in Q1

The payments company’s first-quarter profit rose to $1.1 billion from $84 million last year, adding 14.5 million new active accounts that took its total user base to 392 million. PayPal’s revenue grew 31% YoY in Q1, as the pandemic encouraged customers to shop online, driving a surge in payment volume to new records for the year. 

In addition, Schulman said that cryptocurrencies have been a key growth engine for the firm. He added:

We’ve got a tremendous amount of really great results going on tactically with our crypto efforts.

Half of the payment company’s crypto users open the PayPal app daily, increasing engagement for customers. The firm has increasingly moved into the cryptocurrency space this year, enabling users in the United States to buy, sell and check out using digital assets. 

Since late March, customers who hold Bitcoin, Ether, Bitcoin Cash and Litecoin in PayPal’s wallets can convert their holdings into fiat at checkouts to make purchases.

The digital payments firm has made cryptocurrency payments available to all of its 29 million merchants. PayPal’s decision to adopt digital assets has positioned itself as a rival to Coinbase, the most popular crypto exchange in the US. 

The offering made PayPal one of the largest major financial services companies to embrace the new asset class, adding fuel to virtual currency prices. Bitcoin price has nearly doubled in value since the start of 2021, as the leading crypto continues to see greater adoption.

Taking cryptocurrencies to the next level, the firm also announced plans to launch a “next-generation digital wallet” later this year. In the third quarter, the company expects to roll out a product that is an “all-in-one, personalized app that will provide increasingly customized and unique shopping, financial services and payments experiences.”