PayPal’s plan to morph itself into a “super app” has been given a go for launch

PayPal’s plan to morph itself into a “super app” has been given a go for launch

 PayPal’s plan to morph itself into a “super app” has been given a go for launch.

According to PayPal CEO Dan Schulman, chatting with investors during this week’s second-quarter earnings call, the initial version of PayPal’s new consumer digital wallet app is now “code complete” and the company is preparing to slowly ramp up. Over subsequent several months, PayPal expects to be fully ramped up within the U.S., with new payment services, financial services, commerce and shopping tools arriving quarterly .

The company has spoken for a few time about its “super app” ambitions — a shift in product direction that might make PayPal a U.S.-based version of something like China’s WeChat or Alipay or India’s Paytm. Like those apps, PayPal aims to supply a number of consumer services under one roof, beyond just mobile payments.

In previous quarters, PayPal said these new features may include things like enhanced direct deposit, check cashing, budgeting tools, bill pay, crypto support, subscription management, and buy now, pay later functionality. It also said it might integrate commerce, because of the mobile shopping tools acquired by way of its $4 billion Honey acquisition in 2019.

So far, PayPal has continued to run Honey as a standalone application, website and browser extension, but the super app could incorporate more of its deal-finding functions, price-tracking features and other benefits.

On Wednesday’s earnings call, Schulman revealed the super app would have a couple of other features also , including high-yield savings, early access to direct deposit funds and messaging functionality outside of peer-to-peer payments — meaning you'll chat with family and friends directly through the app’s interface .

PayPal hadn’t announced its plans to include a messaging component until now, but the feature makes sense in terms of how people often combine chat and peer-to-peer payments today. For example, someone might want to form a private request for the funds rather than just sending an automatic request through an app. Or, after receiving payment, a user might want to reply with a “thank you,” or other acknowledgment. Currently, these conversations happen outside of the payment app itself on platforms like iMessage. Now, that could change.

“We think that’s going to drive a lot of engagement on the platform,” said Schulman. “You don’t need to leave the platform to message back and forth.”

With the increased user engagement, the corporate expects to ascertain a bump in average revenue per active account.

Schulman also hinted at “additional crypto capabilities,” which weren't detailed. However, PayPal earlier this month increased the crypto purchase limit from $20,000 to $100,000 for eligible PayPal customers within the U.S., with no annual purchase limit. The company also this year made it possible for consumers to see out at many online businesses using their cryptocurrencies, by first converting the crypto to cash then settling with the merchant in U.S. dollars.

Though the app’s code is now complete, Schulman said the plan is to still iterate on the merchandise experience, noting that the initial version won't be “the be-all and end-all.” Instead, the app will see steady releases and new functionality on a quarterly basis.

However, he did say that early , the new features would come with the high-yield savings, improved bill pay with a far better user experience, and more billers and aggregators, as well as early access to direct deposit, budgeting tools and therefore the new two-way messaging feature.
To integrate all the new features into the super app, PayPal will undergo a serious overhaul of its interface .
“Obviously, the [user experience] is being redesigned,” Schulman noted. “We’ve got rewards and shopping. We’ve got a whole giving hub around crowdsourcing, giving to charities. And then, obviously, buy now, pay later are going to be fully integrated into it. … The last time I counted, it was like 25 new capabilities that we’re going to put into the super app.”

The digital wallet app will also be personalized to the end user, so no two apps are the same. This will be done using both AI and machine learning capabilities to “enhance each customer’s experiences and opportunities,” said Schulman.

PayPal delivered an earnings beat in the second quarter with $6.24 billion in revenue, versus the $6.27 billion Wall Street expected, and earnings per share of $1.15, versus the $1.12 expected. Total payment volume from merchant customers also jumped 40% to $311 billion, while analysts had projected $295.2 billion. But the company’s stock slipped thanks to a lowered outlook for Q3, impacted by eBay’s transition to its own managed payments service.

In addition, PayPal gained 11.4 million net new active accounts within the quarter, to succeed in 403 million total active accounts.

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