PayPal can undercut the competition on fees because it already has a dominant, highly profitable payments network it can leverage. Eighty percent of the top 100 retailers in the U.S. let customers pay with PayPal, and nearly 70% of U.S. online buyers have PayPal accounts. PayPal charges retailers per-transaction fees of 2.9% plus $0.30, and in the second quarter, as Covid-19 made online purchases skyrocket, it saw record revenues of $5.3 billion and profits of $1.5 billion. Its stock has ballooned, adding $95 billion of market value over the past six months. In an economic environment where ecommerce is surging, “PayPal can grow 18-19% before it gets out of bed in the morning,” says Lisa Ellis, an analyst at MoffettNathanson.
APT Price at posting:
$82.08 Sentiment: Sell Disclosure: Not Held
