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PayPal ticks up 5% on earnings, Visa partnership

ICE Graveyard 21/07/2016 Katie Roof

PayPal reported earnings after the bell on Thursday, showing $2.65 billion in revenue for the quarter, when analysts were expecting $2.6 billion. Earnings per share was also in line with Wall Street estimates at 36 cents.

Shares quickly ticked up 5% in after-hours trading, in part because of a Visa announcement that was timed with earnings. The new partnership with Visa , emphasized that they will be collaborating more and will make it easier for customers to move money from their PayPal account to their bank accounts using their Visa debit card. The partnership also means that PayPal digital wallet payments will be accepted at retail locations that facilitate Visa transactions. 

The company returned $300 million to stockholders last quarter, by repurchasing 8 million shares of common stock.

Investors have been curious to see if PayPal is able to successfully monetize its Venmo business. A popular mobile peer-to-peer payment system with Millennials, the company does not charge for these transactions. Venmo processed $3.9 billion in payment volume this quarter.

Venmo recently introduced merchant payments, where businesses would pay PayPal a small cut of each transaction in order to have the “pay with Venmo” option for its customers.

One of PayPal’s biggest businesses is Braintree, a white label mobile payments solution that powers transactions on everything from Uber to Airbnb. When a customer takes an Uber, PayPal makes money by taking a cut of the transaction. Braintree has developed a substantial client list and has become a force in the mobile payments space.

PayPal shares are up 13% since spinning off from eBay a year ago. The company has a market cap of $49 billion.

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