PayPal's Total Payment Volume: What's Fueling Double-Digit Growth?

PayPal Holdings PYPL reported stronger payment volume growth in the first quarter of 2026, with total payment volume (TPV) rising 11% year over year to $464 billion, or 8% on a currency-neutral basis. This double-digit increase reflects broad-based strength across the company’s payment ecosystem despite an increasingly competitive landscape.

A major contributor was the continued strength of Venmo. Venmo TPV grew 14% year over year, marking its sixth consecutive quarter of double-digit growth. Management highlighted Venmo’s momentum as a sign of deeper consumer engagement, supported by expanding debit card usage, Pay with Venmo and broader financial services opportunities.

Payment service provider (PSP) activity also supported growth. PayPal’s PSP volume accelerated to 11% from 7% in the second half of 2025, with Enterprise Payments growing in the mid-teens. The company benefited from stronger merchant retention, disciplined growth in profitable new business, and rising demand for payment processing and value-added services.

Branded experiences provided an additional layer of support. TPV from branded experiences increased 5%, driven by online checkout, PayPal and Venmo debit cards and tap-to-pay transactions. Although branded checkout growth remained modest at 2% on a currency-neutral basis, it improved from the prior quarter and showed early signs of stabilization.

Overall, PayPal’s payment volume growth appears to be driven by a combination of Venmo engagement, accelerating PSP performance, increased debit and tap-to-pay adoption and improving branded checkout trends. If PayPal can keep strengthening consumer value and merchant performance, double-digit TPV growth could remain an important part of its broader turnaround story.

How Block and Adyen Compare on Volume Metrics

Block Inc. XYZ offers a comparable merchant payment metric through Square Gross Payment Volume (GPV). In Q1 2026, Square’s GPV grew 13% year over year to $61.2 billion, supported by stronger seller activity and higher payment volumes. Total GPV reached $63.1 billion. Management’s focus on disciplined execution helped Square maintain momentum despite competitive pressure.

Adyen ADYEY uses processed volume as a key metric. In Q1 2026, processed volume increased 21% year over year to €382 billion, reflecting broad-based growth across global merchants. Net revenues grew 16%, or 20% at constant currency, helped by wallet share gains with existing customers and strong contribution from newer merchant cohorts.

PYPL’s Price Performance, Valuation & Estimates

Shares of PayPal have declined 2.7% in the past three months, underperforming both the broader industry and the S&P 500 Index.

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From a valuation standpoint, PayPal shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 7.66X, at a significant discount to the Zacks Financial Transaction Services industry’s 16.97X.

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PayPal’s estimate revisions reflect a negative trend. The Zacks Consensus Estimate for full-year 2026 EPS is pegged at $5.30, down by a cent over the past two months.

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PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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