The global health crisis has sped up the adoption of digital payments and the industry is now more important than it ever was, PayPal CEO Dan Schulman told CNBC’s Jim Cramer Thursday.
“What I think what’s happened is the world has accelerated from physical to digital across almost every industry,” he said in a “Mad Money” interview.
And PayPal, the parent of an e-commerce portfolio that includes Venmo, Honeywell and Braintree, saw its revenue surge 22% last quarter in the middle of a coronavirus pandemic that pushed the U.S. economy into a perilous position.
As society attempts, with much pushback, to adhere to social distancing guidelines to contain the spread of Covid-19, businesses and organizations across the spectrum have loaded up on tools and technologies to adjust and continue operating under new a new normal.
Health institutions are leveraging telemedicine, schools are equipping themselves with remote learning platforms and retailers are going online or setting up contactless payment systems in their brick-and-mortar locations, said Schulman, who has led PayPal since 2015.
Restaurants, where dining has been restricted by capacity limits, must rely more on take-out and delivery services, he added. Leading delivery operators like Uber Eats, DoorDash and Postmates also rely on online payments to carry out transactions.
Schulman told Cramer that digital was poised to be a key part of the economy, but the pandemic only accelerated the need for online commerce from a timeframe of three-to-five years to three-to-five months.
Between April and June, PayPal recorded $221.7 billion worth of user transactions on its platforms, up 29% year over year from $172.4 billion. The company also had its strongest user growth on record, adding 21.3 million new net active accounts in the quarter.
“Across every industry, we’re seeing this surge towards a digital-first strategy, and all of the tools and products and services that we offer are probably more relevant and important across multiple industries than they’ve ever been before,” Schulman said.
PayPal reported $5.26 billion in revenue, up from $4.3 billion the year prior, in the quarter ending June 30. The e-commerce company posted a profit of $1.26 billion on a non-GAAP basis, or $1.07 of earnings per share, a 49% increase from a year ago.
Wall Street estimated sales of $5 billion and earnings of 87 cents per share, according to Factset.
Shares of PayPal rose 0.91% to $193.07 at Thursday’s close. The stock is up more than 78% year to date.