The news: PayPal’s revenues grew 7% YoY to $8.4 billion in Q3 2025, driven by the success of branded experiences, PSP, and Venmo, per its earnings report.

• Total payment volume (TPV) surged 8% to $459.1 billion.
• Buy now, pay later (BNPL) volume soared over 20% YoY.
• Venmo revenues cracked 20% YoY growth.
• Branded experience volume was up 10% YoY.
• And active accounts were up 1% YoY for a total of 438 million.

What we learned in the earnings call: 

• Venmo debit actives increased over 40%, connecting with young, well-off, digital natives. PayPal’s new partnership with Bilt now allows this demographic to cash in on rewards while paying their rent and mortgage payments through the platform, offering a huge volume win for Venmo.
• PayPal’s Pay Later has room to grow. CEO Alex Chriss said PayPal will make its BNPL products available in other countries.

A new BNPL leader: PayPal’s anticipated 2025 volume of $40 billion paints a picture of a new rising leader for installment plans in the US. We forecast that Affirm’s US volume will hit $35.69 billion this year—which means PayPal may effectively dethrone Affirm’s US dominance before its chief rival Klarna.

PayPal could expand that lead even further with its competitive rewards: Currently, PayPal Pay Later users get 5% cash back with all purchases. While Affirm and Klarna trial subscription plans and Nift gifts, PayPal can lock in value-conscious customers with material rewards.

Driving Venmo growth through in-app commerce: PayPal this week kicked off a new strategy for monetizing and growing Venmo—starting with Bilt. 

Bilt will add Venmo as a new payment method for rent payments, mortgage payments, and for in-app shopping at “Bilt neighborhood” merchants—through either Venmo balances or payment methods linked to Venmo, per a press release. 

What this means: PayPal’s Venmo Everything campaign is bringing Gen Zers in its ecosystem. Its partnership with Bilt will compound this, encouraging users to filter their rent and mortgage payments through its platform to earn rewards. 

Working with Bilt could be a threat to Zelle, which corners the market on essential categories like rent: Among Zelle’s most dedicated users, rent payments grew 13% in August, per Zelle. 

Our take: While PayPal notched a successful quarter, storm clouds are on the horizon.

Basket sizes are shrinking and average order value is sinking, per PayPal CFO Jamie Miller. Leaning into payment flexibility and desirable rewards like cash back can help payment providers earn loyalty from squeezed middle-class consumers.