The payments industry has evolved quickly over the last few years, and surprisingly, PayPal (PYPL) still remains at the forefront. The harbinger of payments as we know it, PayPal was launched in 1998 by eBay (EBAY) and was recently spun off into its own company — a wise move considering how poorly eBay has been at staying ahead in e-commerce.
Most recently, the company’s stock got a huge boost after its fourth quarter earnings report. Not only did it show 16.9% year-over-year revenue growth, but also 27% earnings per share growth. So how does it do it?
Evolving the PayPal experience
Last week, PayPal introduced PayPal 6.0 for Android and iOS smartphones. With the previous app, sending and receiving money wasn’t very intuitive. In fact, you’d have to navigate through a couple menus to get there because its default menu was the Shop screen that included various offers. You couldn’t even see your balance without moving to a different section of the app.
The new app gives you instant access to your balance, activity and relevant actions (i.e. sending and requesting money) when you log in. It also lets you personalize your contacts so you can keep the people you regularly send money to at the top of your list.
PayPal 6.0 is a product of, wait for it, the company actually listening to the customer. According to TechCruch:
The company says that it built the new application with customer feedback in mind, as well, having even spent time with its 8,000 customer service representatives to learn what sort of problems come up most often.
Considering PayPal has seen 100% growth in its send-and-request feature over the last few years, this new update is a huge step toward giving its customers exactly what they want.
Venmo
Is it odd to think that PayPal’s future involves a product that directly competes with its core product? PayPal acquired Braintree, which operates Venmo, in 2013. Until recently, Venmo wasn’t monetizing. Last October, however, PayPal laid out plans to let merchants accept payments through the app. According to the Fortune report on the matter, Venmo had tripled its payment volume during the third quarter of 2015 (from $700 million to $2.1 billion). PayPal also said that the average Venmo user sends and receives payments multiple times a week, so obviously it’s caught on for those who have discovered it.
