Mobile Commerce Daily is now Retail Dive: Mobile Commerce! Click here to learn more!

Were PayPal’s strong mobile results due to its One Touch checkout?

PayPal Holdings Inc. Q4 results revealed a 17 percent increase in revenue and optimism for its One Touch platform, an outcome that might lead competitors to speed up rollout of frictionless payments.

During the PayPal earnings call, the company proposed a few of its priorities for the upcoming year, including expectations that its One Touch platform — PayPal’s fastest mobile checkout experience — will continue to experience strong adoption. The company also consolidated its leadership in the mobile payments sector last year, culminating in a star turn during the holiday season through One Touch and its popular social payments platform, Venmo.

“PayPal’s OneTouch is a significant player in the U.S. market as a part of the larger PayPal entity and has shown to give merchants a better than average conversion rate according to PayPal, north of 85% actually,” said Marci Troutman, CEO of SiteMinis. “With a few competitors knocking on their clients doors to grab U.S. market share in the next decade, PayPal’s increased investment in OneTouch is certainly poised to help with their retention of consumers in the U.S.”

Promising numbers
PayPal’s revenue grew in Q4 to the tune of $2.981 billion, which includes an operating cash flow of $923 million and a free cash flow of $771 million.

Overall, the company’s revenue grew last year to $10.842 billion. Much of this growth came about as the result of its 6.1 billion payment transactions this year, an increase of 24 percent that contributed to the company’s $354 billion Total Payment Volume (TPV) in 2016.

Of the $99 billion TPV processed in Q4, $31 billion was sourced from the company’s various mobile platforms, which include the aforementioned Venmo and One Touch. The company’s mobile TPV grew by an astounding 53 percent to represent almost one third of total payment volume in Q4, and Venmo’s $5.6 billion of TPV constituted a whopping 126 percent growth.

The holiday season was a crucial litmus for discerning PayPal’s mobile payment’s penetration, and the ensuing results did not disappoint: in the five days between Thanksgiving and Cyber Monday, PayPal processed more than $2 billion in mobile payments, and mobile accounted for one-third of overall TPV.

On the merchant side, One Touch ended the year with more than five million merchant accounts offering its service to over 40 million active consumer accounts, a strong foundation to begin 2017 in pursuit of even more frictionless mcommerce transactions.

Mobile growth
The 31 percent of TPV that PayPal touted in Q4 is an increase over the company’s 25 percent figure from the same quarter a year ago, and is mostly due to increased investment in merchant-side platforms, strategic partnerships and the staggering growth of Venmo, which itself is a part of a social payments revolution within mobile payments, especially with younger cohorts (see story).

Paypal recently expanded coverage of its PayPal Cash program by letting consumers add cash to their accounts at any 7-Eleven store, a move that makes it possible for consumers to deposit cash directly into their PayPal accounts, bypassing ATMs and bank systems, at over 8000 locations around the country (see story).

“I’m pleased to report that PayPal ended 2016 with another strong quarter of financial results,” said Dan Schulman, President of PayPal. “We extended our industry leadership by generating 18 million active customer accounts, with greater engagement than ever before.

“We innovated across our merchant and consumer value propositions and extended our lead in mobile payments,”