The apparel chain filed for bankruptcy in January and closed its e-commerce site and stores.
The payment provider’s total revenue increased 17.2% in 2016.
PayPal Holdings Inc. processed $31 billion in mobile payments in the fourth quarter that ended Dec. 31, up 53% from the same period in 2015, the company reported Thursday. The payment processor handled more than $2 billion in mobile transactions during the flurry of online holiday shopping over the five-day span from Thanksgiving to Cyber Monday, and mobile accounted for a third of total payment volume during that period.
“Mobile is becoming an increasingly important competitive differentiator for PayPal,” PayPal president and CEO Dan Schulman told analysts on PayPal’s Q4 2016 earnings call, according to a transcript from Seeking Alpha. “More than half of our active account base transacted on the PayPal platform using their mobile device over the last 12 months.”
With mobile transactions accounting for nearly one-third of all PayPal payment processing in the fourth quarter, the company says it is reaping the benefits of technological advancements that make online shopping simpler and faster on smaller screens.
One Touch is a PayPal feature that allows customers to opt to remain logged in on their PayPal account on both a desktop or mobile device and skip the PayPal sign-in screen while making a future purchase with eligible merchants. When customers use the same device and browser, they can complete the checkout process with one click. According to PayPal, 5 million merchants offered One Touch to more than 40 million shoppers with PayPal accounts during fiscal 2016.
When a customer initiates the checkout on a mobile device, they abandon their shopping carts between 65% and 74% of the time because it’s difficult to enter payment information, Schulman said. But with One Touch, 87% of transactions on mobile devices are completed, he added.
In its first full year as an independent public company after separating from eBay, PayPal’s revenue increased 17.2% to $10.842 billion, up from $9.248 billion last year. For the fourth quarter the company’s revenue grew 16.6% to $2.981 billion from $2.556 billion during the same period last year.
Revenue from Venmo, PayPal’s peer-to-peer payment app, grew 126% in the fourth quarter with the app processing $5.6 billion worth of transactions during the quarter. According to a report from e-commerce analysts at Baird Equity Research, PayPal already is the payment method for $1 out of every $6 spent online.
For the full year, PayPal grew customer accounts by 18 million, marking 10% growth to reach 197 million total users. PayPal handled 6.1 billion payment transactions in 2016—up 24% year over year.
PayPal also added 5.4 million customer accounts in the fourth quarter, accounting for 30% of its total account growth for the year. During Q4, the company processed 1.755 billion payment transactions, up 22.8% from 1.428 billion transactions during the same time the previous year. Q4 transactions totaled $99.35 billion, up 21.9% from $81.52 billion in the fourth quarter of 2015.
“I’m proud of all the accomplishments that the PayPal team delivered, yet in so many ways, we were just scratching the surface of the market opportunities in front of us,” Schulman said. “Payments are rapidly digitizing. Mobile is redefining the [face] of retail. And with the worldwide adoption of smartphone[s], consumers have all the power of a bank branch in the palm of their hands, which will no doubt transform the way they manage and move money.”
In a Bloomberg News piece published shortly after the earnings call, Schulman reportedly said in an interview that his company is in discussions with Amazon.com Inc. to let shoppers on the e-commerce giant’s site use their PayPal accounts during checkout. A PayPal spokeswoman declined to comment on the rumors. An Amazon spokesman also declined to comment.
For the fourth quarter ended Dec. 31, PayPal also reports:
- U.S. revenue of $1.574 billion, up 20.9% from $1.302 billion last year.
- International revenue of $1.407 billion, up 12.2% from $1.254 billion last year.
- Net income of $390 million, up 6.3% from $367 million last year.