PayPal’s Q2 Focus Shifts From Macro Worries to Winning Checkout

PayPal Holdings Inc. used its Q2 earnings call to talk less about inflation or consumer spending softness and more about the tactics it says will secure its place at the virtual and in-store cash register. Chief Executive Alex Chriss laid out a five-point plan — digital wallet reach, BNPL, agentic AI, debit expansion and crypto rails — that shaped the discussion even more than the company’s 5% revenue gain over Q1.

Chriss devoted the most airtime to digital wallet growth and last week’s launch of PayPal World, a platform that promises to let any participating wallet pay any PayPal merchant. “Five of the largest digital wallets in the world — PayPal, Venmo, Mercado Pago, Tenpay Global and UPI — are coming together on a seamless global platform so you can now use your preferred wallet anywhere in the world,” he told analysts, calling the move “a game changer for our branded experiences.”

The effort is aimed at interoperability rather than macroeconomics. Chriss argued that fragmented regional wallets, not consumer weakness, are what slow cross‑border commerce. PayPal’s own footprint edged higher as active accounts rose 4% from the March quarter to 438 million.

PayPal’s installment payment portfolio again grew more than the core business. “In the second quarter, BNPL volume grew more than 20% and monthly active accounts climbed 18%,” Chriss said. He added that average order values using buy now, pay later (BNPL) run “more than 80% higher” than a standard branded checkout transaction, a statistic the company is using to recruit merchants who already accept PayPal but have yet to surface its installment options early in the shopping journey. The release showed loan receivables up 7% sequentially to $6.9 billion as credit performance remained “strong.” Management reiterated that it continues to sell most European BNPL receivables, keeping the balance sheet light.

Chriss also talked up agentic commerce. “Agentic AI is rapidly changing the commerce landscape and PayPal is at the forefront,” Chriss said, citing partnerships with Perplexity, Anthropic and Salesforce to embed PayPal checkout inside artificial intelligence (AI) clients. For merchants, the pitch is that PayPal’s know your customer (KYC) infrastructure and access to “the largest ecosystem of payment-ready wallets” will simplify compliance when bots, not humans, initiate transactions. No revenue contribution was disclosed, but Chriss framed the capability as foundational rather than experimental.

PayPal’s physical and virtual debit cards, which have long been overshadowed by the wallet’s credit and P2P features, got their own growth figures. Debit card TPV across PayPal and Venmo grew more than 60% while monthly active accounts grew more than 65%, Chriss said. Two million users tapped a PayPal or Venmo debit card for the first time in the quarter, reinforcing Chriss’s thesis that cardholders transact more often and choose PayPal at checkout six times as frequently as non-card users.

Germany has become PayPal’s test bed for an all-in-one wallet that combines near-field communication tap to pay, BNPL and in-app offers. Early results show 3 million NFC enrollments and users making 16 transactions a month on average, the CEO said.

Chriss framed PayPal’s dollar-backed stablecoin, PYUSD, as a tool to cut cross-border fees and delays. “Traditional payment methods can be prohibitively expensive and time‑consuming,” he said. “PYUSD delivers a stable, reliable and cost-effective alternative.” PayPal added yield rewards for holding the coin, expanded issuance to the Stellar and Arbitrum blockchains and said PYUSD would power PayPal World transactions that settle in local currency on the back end.

The company also announced “Pay with Crypto,” earlier this week, which will convert more than 1,100 cryptocurrencies into PYUSD or fiat at checkout. Chriss said it positions PayPal as processor, not custodian.

PayPal reported second-quarter net revenue of $8.29 billion, up 6% from the March quarter’s $7.79 billion and 5% year over year. Total payment volume rose by the same sequential 6% to $443.5 billion. Active accounts inched up to 438 million, reversing last year’s attrition but still growing more slowly than volume.

Transaction margin dollars, a company metric that strips out operating costs, increased 7% year over year to $3.84 billion, or 8% when interest on customer balances is excluded. Non-GAAP earnings per share climbed 18%.

Management again raised full-year guidance for both transaction‑margin dollars and earnings per share, even while acknowledging an “uneven” consumer backdrop in some corridors. The absence of dire macro commentary was itself a signal: PayPal believes its checkout strategy, not the economic cycle, will determine whether it can accelerate growth.

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