PayPal Is Growing, but Not the Way it Used To

PayPal beat its revenue growth target in the first quarter and raised its forecast for the year. But the changing focus of the company is still sending investors for a loop.

The payments company’s growth, which slowed after a surge during the early stages of the pandemic, is now being fueled by a couple standouts. First, by so-called unbranded, behind-the-scenes payment processing. This is PayPal’s business as the software and services provider that works with merchants to enable them to accept a variety of payment types, like cards or a competitor’s checkout button. Another major other driver is interest rates, which help the company earn more on the cash that users leave in their PayPal and Venmo accounts.