PayPay reported a seventh consecutive quarter of higher sales and profit on November 4 and raised its full-year forecast for the fiscal year ending March 2027, as revenue from lending and financial services grew faster than the fees it earns on payments.
For the July-to-September quarter, operating revenue rose 28% on the year to ¥118.1 billion, and adjusted EBITDA came to ¥42.1 billion, or 35% of revenue. For the April-to-September half, adjusted EBITDA climbed 57% to ¥79.5 billion.
The company lifted its full-year operating revenue forecast to ¥474 billion to ¥478 billion from ¥465 billion to ¥473 billion. It now expects adjusted EBITDA of ¥159 billion to ¥163 billion, up from ¥149 billion to ¥155 billion.
The branches are growing
PayPay describes payments as the trunk of a tree and its other businesses as the branches. Installment payments, revolving credit and cash advances, mainly through PayPay Card, are expanding, and the banking and other financial services around them are growing too.
Gross merchandise value, the total value of payments processed, reached ¥5.6 trillion in the quarter, up 20% on the year. PayPay Card and PayPay Credit, the name for card payments made inside the app, grew fastest.
PayPay tracks payments per user and spending per user as its key targets, and leans toward the first. Card payments allow larger transactions, which lifts the average ticket, and the number of payments per user is rising sharply as well.
The share of registered users who are active rose to 56% from 36% in the second quarter of the fiscal year ending March 2020, shortly after the service launched in October 2018. Monthly spending per user is about four times what it was then.
Registered users reached 75.6 million at the end of September, close to the ceiling of Japan's addressable population. PayPay does not run a bank-as-a-service business, the model NTT Docomo and Rakuten use to supply banking to outside partners and add accounts.
A year of deals
PayPay has moved quickly through 2026. In February it signed a strategic partnership with Visa and said it would run its US business through a new company led by PayPay. In June it agreed to buy 70.2% of T&D Financial Life Insurance, taking it into insurance. In July it joined SoftBank and others in a capital and business tie-up with Seven & i Holdings and said it would merge IDs with Seven-Eleven Japan.
“People may think of PayPay as offline payments, but from here we will put more emphasis on online, where transaction values are higher.”Ichiro Nakayama, PayPay president