In a year that saw e-commerce boom in face of the COVID-19 pandemic, both eBay and PayPal reported strong results, with the latter approaching a major milestone in its quest to becoming the dominant online payment platform.
With payment volume climbing to $277 billion in the fourth quarter, PayPal ended the year with a total payment volume of $936 billion, bringing the $1 trillion mark within touching distance for 2021. "PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic," the company's CEO Dan Schulam said in Wednesday's earnings release, which saw revenue climb to $21.5 billion and net income jump 71% to $4.2 billion in 2020.
In its first year under newly-appointed CEO Jamie Iannone, eBay also reported the strongest growth in years, all while still trailing its former payment arm. With revenues of $10.3 billion and net income of $2.5 billion, eBay exceeded expectations in 2020 after merely trudging along a booming industry for years.
Ever since PayPal was spun off into a separate company in 2015, eBay has struggled to keep up with its rivals’ growth, while also being outgrown by its former payment division. Between Q4 2015 and Q4 2020, eBay’s gross merchandise volume, i.e. the total value of all goods sold on eBay’s marketplace, grew by just 21 percent. Meanwhile PayPal’s total payment volume grew by 240 percent, propelling the company’s market capitalization to $295 billion, while eBay’s stands at $40 billion as of February 3, 2021.
