P2P payments’ role in PayPal’s future strategy: Insights from Investor Day
PayPal’s Investor Day focused on commerce, but included some key insights about how it is thinking about its P2P products, including Xoom and Venmo. We take a look at some of the key takeaways.
This week saw PayPal host an investor day that marked a move from the “transition year” of 2024 to a focus on what CEO Alex Chriss dubbed “PayPal 2.0”.
While much of the event focused on the transition from payments company to AI-driven commerce platform, the company also provided some key insights into the current and future role of P2P domestic and cross-border payments, including Xoom, PayPal P2P and Venmo.
We look at some of the key P2P-related takeaways from PayPal’s investor event. Topics covered:
- PayPal’s P2P payments division is growing
- Customers will no longer need Xoom accounts to send remittances
- PayPal P2P is key to broader customer acquisition
- PayPal is planning to relaunch its P2P product
- Venmo is growing, but plans remain domestic
- PayPal has strong growth goals for P2P
PayPal’s P2P payments division is growing
In both total payments volume (TPV) data that it shared and in how it characterised the company, PayPal is now grouping its P2P payments products as P2P and Other Consumer, a segment that the company described as comprising “P2P (PayPal and Venmo), debit (PayPal and Venmo), except when used to find a branded checkout (online transaction), and remittances”.
This segment accounted for 26% of all PayPal TPV in 2024, for a TPV of $437bn, and achieved a YoY FX-neutral growth rate of 7%. This means that while it retained the same share as 2023, it has seen improved growth, in part due to investment in non-Venmo P2P, which in 2023 stood at 3%.
Without Venmo, this segment’s TPV was $151bn in 2024, around $126bn of which is likely to be PayPal P2P and Xoom combined.
Customers will no longer need Xoom accounts to send remittances
While Xoom saw very little mention at the event, there were some key changes for the brand. As part of a discussion of how the company was integrating its products into a single system with a single customer profile, PayPal CTO Srini Venkatesan confirmed that PayPal P2P has integrated Xoom’s rails for cross-border transactions.
“Today, PayPal and Xoom are unified, making it possible to send foreign remittances through the PayPal app, no Xoom log-in required,” he said.
This move, along with the lack of direct mentions of Xoom in discussions of the P2P and Other Consumer segment throughout investor day, indicates that PayPal P2P will be a higher priority for the company for cross-border transactions going forward.
However, this does not mean Xoom is being removed as a brand. A PayPal spokesperson confirmed to us that “both PayPal and Xoom remain priorities” for P2P payments and that while customers would be able to send through Xoom from PayPal, the company will also continue to support Xoom as a standalone product for those that wish to continue using it in this way.
PayPal P2P is key to broader customer acquisition
This focus on keeping users within the PayPal ecosystem rather than referring them to Xoom for cross-border money transfers may relate to the fact that P2P is now being seen as a key customer onboarding route for PayPal.
“Our users can send money virtually anywhere and everywhere: it’s a cornerstone of our consumer ecosystem and user acquisition strategy,” explained Diego Scotti, GM of PayPal’s Consumer Group.
“50% of our new users come from P2P and over $10bn of P2P funds are re-spent through checkout. So not only is P2P bringing in new users, but it keeps them engaged.”
PayPal is planning to relaunch its P2P product
In addition to bringing Xoom services into PayPal P2P, which saw a 13% YoY increase in transactions in 2024, the company confirmed that it is also increasing the capabilities of the product.
This will see it broaden its payout capabilities to enable instant transfers to bank accounts and mobile wallets, as well as adding support for cash and digital currencies. The company also plans to add support to send cross-border payments via text or Messenger.
“We will continue to innovate on P2P with new features. Soon, we will let you send money instantly to bank accounts and mobile wallets or send cash and digital currency like crypto nearly anywhere in the world,” explained Scotti. “This is something that only PayPal can deliver.”
This will also see it continue to build out its crypto payments capabilities, including via its stablecoin PYUSD, which is designed to be used both as a store of value and a means of paying at checkout, as well as being able to be sent to other users globally.
The company reported that in 2024 it saw its crypto send volume reach around $2bn, a 280% increase on the previous year.
Venmo is growing, but plans remain domestic
While PayPal P2P is “maniacally focused on young families and individuals in their 30s and 40s who have medium to high incomes,” according to Scotti, PayPal’s largely US domestic payments brand Venmo is focused on Gen Z recent graduates and professionals.
“We are evolving Venmo to become the next generation’s go-to money movement app,” he added.
Venmo now processes more than $18bn in P2P flows monthly, and the company now plans to drive further spending on the platform by increasing where it can be used to pay, as well as adding greater money management tools and rewards to encourage greater use of the app as a store of money. This will enable the company to maximise the average revenue per user.
With this in mind, the company also plans to grow use of both the Venmo debit card and Pay with Venmo. While Venmo debit cards had a 2024 TPV of around $13bn, the company plans to grow this at a CAGR of more than 20% to 2027, while Pay with Venmo’s $8bn TPV is set to see a CAGR of more than 40% over the same period. PayPal is ultimately targeting more than $2bn revenue from Venmo alone by 2027.
However, while much was said about maximising use of Venmo, there was no mention of adding cross-border payment capabilities, or broadening the product’s geographical reach.
PayPal has strong growth goals for P2P
PayPal did share some market-level growth data for its P2P and Other Consumer TPV, with the company seeing 2024 growth of between 15% and 20% in Germany and France, Italy and Spain, as well as 5-10% growth in the US. However, the UK and Australia, which are key cross-border markets, saw less than 1% P2P growth in 2024, making these high priority markets to improve.
PayPal P2P overall has begun to pick up pace on growth after a period of sustained sluggishness, with CFO Jamie Miller reporting that it had “accelerated for the sixth consecutive quarter to 6%” in Q4 2024. With this in mind, the company is now looking to sustain mid single-digit-plus growth in PayPal P2P and PayPal cross-border P2P through to 2027, focusing particularly on key cross-border corridors, most likely related to the key markets above.
More broadly, however, the company is now projecting the P2P and Other Consumer TPV growth rate to reach 10% YoY by 2027, which is likely to see it pass $550bn in TPV.
Given the peripheral nature of P2P payments to some of PayPal’s core focuses at its investor day, we are likely to have only had a very high-level taste of what is to come for P2P payments. However, given its priority as a customer acquisition tool, we can expect to see far more ahead, particularly as PayPal begins to roll out improved P2P capabilities over the course of the year.
