PayPal Holdings, the global online payment platform, is expecting a strong rebound in payment volumes in the second quarter of this year. This growth is largely attributed to the increase in online shopping activities amid the COVID-19 pandemic. As a result of this optimistic outlook, PayPal’s shares experienced an 8% increase in extended trading.

The surge in demand for online retail has led to a corresponding surge in digital payments. In fact, PayPal reported a record-breaking addition of 7.4 million new customers in the month of April alone. This clearly demonstrates the growing importance and necessity of PayPal’s products and services in the current market.

However, despite the positive forecast, PayPal experienced an 87.4% decline in profit for the reported quarter. This decline was primarily due to an increase in credit loss reserves in response to the uncertain economic environment caused by COVID-19. The company acknowledged the impact of the pandemic on its business, particularly in the travel and events sectors, which witnessed significant declines in both volumes and revenue.

When it comes to payment processing, PayPal facilitated a total of $191 billion in payments in the first quarter, marking an 18% increase compared to the previous year. While this figure fell short of analysts’ estimates of $194.23 billion, it still highlights the overall resilience and progress of the company’s operations.

During the first quarter ending on March 31, PayPal’s net income plummeted to $84 million, or 7 cents per share, compared to $667 million, or 56 cents per share, during the same period last year. This decline was mainly attributed to the aforementioned increase in credit loss reserves. However, excluding these one-time items, PayPal actually earned 83 cents per share, surpassing analysts’ expectations of 75 cents per share.

Overall, PayPal is confident in its future performance as it anticipates continued growth in the coming months. The disruption caused by the pandemic has accelerated the adoption of online shopping and digital payments, positioning PayPal at the forefront of this rapidly evolving industry. With its strong customer base and innovative services, the company is well positioned to capitalize on the surge in online spending and maintain its position as a leading global payment platform.

Useful Links:
1. PayPal official website
2. PayPal’s acceptance of Bitcoin as a payment method