It’s no secret that PayPal had a breakthrough year over the past 12 months. Due to people working predominantly from home and spending a significant amount of time indoors, the volume of customers turning online to make purchases sky-rocketed.
The company added more than 72 million new accounts in 2020, the strongest 12-month performance for that metric in PayPal’s history while generating fourth-quarter revenues of over $6-billion. According to the company, the good times are set to roll for some time with predictions that it will have up to 750 million users within the five years, which would be double its current base.
To achieve those lofty goals, the company has set about creating what it hopes will become the go-to banking app for millions of people worldwide. It will do this by filling a hole it sees in the market.
According to CEO Dan Schulman, there are simply too many financial apps available that do too many different things. He plans to provide a platform that consolidates everything a user would need from a banking app — such as managing payments, shopping, saving, investing, and purchasing cryptocurrency – all in one place.
PayPal is so perfectly positioned to pull this off because of the enormous growth it experienced last year. With 361-million users worldwide, PayPal has proven time and again that it is an easy, fast, and very secure platform to use. It has become the preferred online payment around the world. For example, in countries like Australia, where 70% of the population is making purchases online, PayPal’s name has become ubiquitous across various industries.
For instance, popular online retailer MyDeal saw revenue growth of 164% in 2020 with PayPal as its preferred online payment service provider. PayPal is also used as one of the payment methods in the local food delivery services such as Menulog. Another industry that is making use of PayPal is Fetch, a subscription TV service with over 760,000 subscribers. The iGaming industry has also adopted this payment method, as many PayPal betting sites are offering it to its Aussie players due to its convenience and security.
“What a super app wants to do is turn all of those separate apps into a connected ecosystem where you can streamline and control data and information between those apps, between the act of shopping, the act of paying for that,” explains Schulman. “And then you have this common platform and common data that allows machine learning and artificial intelligence to kick in and give personalised recommendations to those consumers.”
The major challenge facing the super app is that it will need to include a wide range of digital payment options online and offline. According to Schulman, they aim to include traditional financial institutions like credit and debit cards and have things like loyalty reward point redemption, cryptocurrency payments, and getting ahead of the game by getting ready for central bank-issued digital currencies.