PayPal revealed on Wednesday that its fourth-quarter profits had tripled from the year before, and that two of its new products—a cryptocurrency tool and a “buy now pay later” feature—had exceeded the company’s expectations. The news caps off a huge 2020 for the fintech giant, during which it posted record profits and revenue, thanks partly to a shift by consumers away from cash during the pandemic.
PayPal’s share price surged over 6% in after-hours trading to $268, an increase fueled by rosy guidance the company offered for 2021.
On a conference call with investors, CEO Dan Schulman predicted the company’s mobile platform would evolve into a “superapp.”
“We’re building our digital wallet into a superapp that transcends across payments and financial services,” he said.
Schulman suggested this would be spurred by new levels of “engagement”—a term typically used to measure social media apps—among users, including Bitcoin customers who, the company said, opened the PayPal app at twice the rate of others.
If Schulman’s prediction is correct, it could signal that North American payment apps will come to resemble their counterparts in Asia, like WeChat, which blend a variety of financial and social networking. One of PayPal’s products, Venmo, already encourages users to share details of their transactions on a Facebook-style media feed.
PayPal did not share how many people are using its app to buy Bitcoin or how much it is earning from the service. But Schulman noted that the company intends to introduce tools to 29 million merchants worldwide to begin accepting crypto as payment.
“These initial steps are just the beginning of an extensive road map around crypto, blockchain, and digital currencies,” said Schulman, though he didn’t provide further details about what this would entail. PayPal announced in November that it had planned to integrate Bitcoin into Venmo.
On the call, Schulman also described PayPal’s new “buy now pay later” feature as surpassing the company’s expectations. Known in the industry as BNPL, this feature lets merchants offer consumers a means to pay for products on their websites in installments. BNPL, which was pioneered by companies like Affirm and Klarna, has proved popular with consumers, but it’s also drawing regulatory scrutiny.
In its press release, PayPal noted that quarterly revenue exceeded $6 billion for the first time, and that it expected revenue to grow around 19% in 2021, to over $25 billion. The company’s fourth-quarter earnings per share came in at $1.32 compared with 43¢ a year earlier on a GAAP basis. Using a non-GAAP metric, PayPal posted EPS of $1.08. That compares with 83¢ from a year earlier and exceeded analyst predictions of $1 a share.
More must-read finance coverage from Fortune:
- How to cultivate the next generation of Black CEOs, according to M&T Bank CEO René Jones
- The Robinhood revolt was good for Webull, China’s little-known trading app
- When will the economy return to “normal”? New CBO report offers hints—and one big question mark
- 5 steps the U.S. government could take to tackle the crisis facing working women
- Elon Musk says Tesla’s giant Berlin factory will be “fun and cool”—free of reptiles, bats, and maybe unions, too