페이팔(PYPL) 2026년 3분기 실적 발표 컨퍼런스 콜: EPS 성장, 벤모 모멘텀 및 가이던스 상향

페이팔 홀딩스(PYPL)가 2026년 3분기 거래 마진 개선, 절제된 비용 증가, 그리고 금융 서비스(Financial Services), 벤모(Venmo), 결제 처리 분야에서의 지속적인 모멘텀을 발표했다. 경영진은 2027년 추가 투자 계획을 시사하는 한편 연간 실적 전망(가이던스)을 상향 조정했다.

핵심 요약

• 거래 마진 달러(Transaction Margin Dollars)는 약 2% 증가했으며, 고객 잔액 이자를 제외하면 3% 증가했다.
• 비재무보고기준(Non-GAAP) 조정 주당순이익(EPS)은 견조한 거래 마진 실적과 비거래 영업비용의 1% 증가에 힘입어 8% 상승한 1.45달러를 기록했다.
• 조정 잉여현금흐름은 20억 달러를 기록했다. 페이팔은 이번 분기 동안 15억 달러 규모의 자사주를 매입했으며, 최근 12개월간 60억 달러를 매입했다.
• 금융 서비스는 2026년 거래 마진 달러의 20% 이상을 차지했으며 두 자릿수 성장률을 기록했다.
• 벤모는 8분기 연속 두 자릿수 총결제액(TPV) 성장을 이어갔다. '페이 위드 벤모(Pay with Venmo)'와 선구매 후결제(BNPL) 거래액은 각각 43%, 25% 증가했다.
• 경영진은 2026년 전체 연간 가이던스를 Non-GAAP EPS 약 5.60달러, 조정 잉여현금흐름 최소 65억 달러로 상향 조정했다.

핵심 재무 데이터

사업 및 운영 실적

금융 서비스

금융 서비스는 2026년 페이팔 거래 마진 달러의 20% 이상을 창출했으며 두 자릿수 성장을 기록했다. 경영진은 선구매 후결제(BNPL), 신용카드, 체크카드, 탭투페이(Tap to Pay), 가맹점 대출을 이 포트폴리오의 핵심 요인으로 꼽았다.

선구매 후결제(BNPL) 거래액은 25% 성장했으며, 독일과 오스트리아의 아마존(Amazon), 아메리칸 이글(American Eagle), 딕스 스포팅 구즈(Dick’s Sporting Goods) 등 가맹점을 통해 판로를 확대했다. 페이팔은 매장 내 결제용 BNPL 기능이 포함된 카드를 포함해 제품 및 지역 커버리지를 확대할 계획이다.

경영진은 금융 서비스를 이용하는 소비자의 계정당 평균 매출(ARPA)이 해당 제품을 이용하지 않는 고객보다 2~5배 높다고 밝혔다. 회사는 재무제표 내(on-balance-sheet) 및 재무제표 외(off-balance-sheet) 신용 자금 조달 간의 균형 잡힌 접근 방식을 유지할 방침이다.

벤모

벤모는 8분기 연속 두 자릿수 TPV 성장을 기록했으며, ARPA 역시 두 자릿수 비율로 증가했다. 벤모 체크카드(Venmo Debit Card) 월간 활성 계정 수는 55% 이상 증가한 670만 개에 달했으며, 이번 분기 동안 분기 기준 최대치인 160만 명의 신규 사용자를 추가했다.

'페이 위드 벤모' TPV는 43% 성장했다. 체크카드와 '페이 위드 벤모'를 모두 사용하는 월간 활성 계정 수는 전년 동기 대비 두 배 가까이 늘었다. 경영진은 현재 벤모 고객의 23%만이 금융 서비스 제품을 사용하고 있어 수익화를 확대할 여지가 충분하다고 전했다.

브랜디드 체크아웃

자체 브랜드 결제(Branded Checkout) TPV 성장률은 4분기 연속 1%~2% 수준을 유지했다. 페이팔은 미국 시장에서 3분기 연속 개선되었고 독일에서는 안정화되었고 보고했다.

페이팔은 최신 결제 환경, 향상된 페이팔 노출, BNPL 연동, 공동 마케팅 등을 통해 고가치 소비자 및 엄선된 가맹점에 집중하고 있다. 경영진은 전체 전략(playbook)을 도입한 가맹점 그룹의 상대적 결제 점유율이 개선되었으나, 이러한 이니셔티브는 아직 초기 단계이며 일반적으로 2~3년에 걸쳐 평가된다고 덧붙였다.

결제 처리 및 부가 서비스

전체 결제 서비스 제공업체(PSP) 거래액은 8% 성장했고, 브레인트리 TPV는 10% 증가했다. 페이팔은 단순한 물량 성장보다는 수익성 있는 결제 처리 성장을 강조했다.

부가 서비스의 서비스 연계율(attachment rate)은 전년 동기 5%에서 6%로 상승했다. 회사는 추가적인 도입 확대 및 마진 확장을 지원하기 위해 전문 영업팀과 서비스형 리스크 관리(Risk-as-a-Service), 송금(Payouts), 청구(Invoicing), 가맹점 대출 등의 제품에 투자하고 있다.

비용 절감, 기술 및 AI

페이팔은 2,000명 이상의 인원을 감원하고 대부분의 조직에서 3개의 직급 단계를 축소했다. 관리직 역할은 4분의 1 이상 줄어들었다.

회사는 2026년 4분기 말 연간 환산(run-rate) 절감액 7억 달러 이상을 포함해, 2~3년에 걸쳐 총 연간 환산 기준 최소 15억 달러의 비용 절감을 달성하는 궤도를 유지하고 있다. 절감액의 상당 부분은 성장 이니셔티브에 재투자될 예정이다.

페이팔은 75억 개의 고객 기록을 클라우드 인프라로 이전했다. 페이팔의 AI 고객 서비스 에이전트는 현재 190개국 6개 언어로 운영되며 올해 들어 현재까지 2,400만 건 이상의 문의를 처리했다. 회사는 또한 메타(Meta) 및 기타 AI 기업들과 협력하여 페이팔을 AI 개인 에이전트 및 에이전트 커머스(agentic commerce)에 통합하고 있다.

경영진 가이던스

2026년 전체 연간 실적과 관련해 페이팔이 현재 예상하는 사항은 다음과 같다.

• 거래 마진 달러 약 157억 달러 (고객 잔액 이자 제외 시 146억 달러)
• 비거래 영업비용의 4~6% 성장
• Non-GAAP EPS 약 5.60달러
• 조정 잉여현금흐름 최소 65억 달러
• 약 60억 달러 규모의 자사주 매입
• 기존 고정환율 기준 예상치와 부합하는 온라인 브랜디드 체크아웃 TPV 성장률

2026년 4분기에 대해 경영진이 예상하는 사항은 다음과 같다.

• 고정환율 기준 1~3%의 매출 성장률
• 고객 잔액 이자 제외 기준을 포함한 거래 마진 달러의 소폭 플러스(+) 성장
• 비거래 영업비용의 전년 수준 유지 또는 1~3% 성장
• Non-GAAP EPS 약 1.43달러
• 유럽 내 역풍이 지속된다는 가정하에 온라인 브랜디드 체크아웃 TPV 성장률 1%~2%

2027년 경영진은 거래 마진 달러와 영업비용 투자를 늘리는 동시에 2026년과 유사한 수준의 Non-GAAP EPS 성장을 목표로 하고 있다. 중기적으로 회사는 4~6%대의 거래 마진 달러 성장, 영업 레버리지 효과, 자사주 매입이 지속 가능한 두 자릿수 EPS 성장을 뒷받침할 수 있다고 믿는다. 이는 실현된 결과가 아닌 경영진의 목표치다.

리스크 및 주요 점검 분야

• 유럽연합(EU)의 소액 면세 혜택 폐지는 전체 브랜디드 체크아웃 실적에 약 70bp(0.7%p)의 역풍으로 작용했다. 경영진은 이러한 영향이 2026년 4분기까지 이어질 것으로 예상하고 있다.
• 영국 시장은 여전히 어려운 상황인 반면, 독일은 안정적이거나 소폭 개선 추세를 보였고 이탈리아와 프랑스는 안정적인 성장세를 기록 중인 것으로 언급되었다.
• 브랜디드 체크아웃 성장률은 1%~2% 수준을 유지했으며, 경영진은 가맹점 이니셔티브가 아직 초기 단계이며 결실을 맺기까지 2~3년이 걸릴 수 있다고 경고했다.
• 페이팔은 비용 절감액의 상당 부분을 재투자할 계획이며, 이로 인해 비용 절감 시점과 신규 지출 시점 간의 분기별 시차가 발생할 수 있다.
• 경영진은 제품, 시장, 마케팅 및 전문 영업팀에 대한 투자가 늘어나고 있으므로 3분기 비용 실적을 연간 기준으로 단순 환산해서는 안 된다고 밝혔다.

애널리스트 Q&A 주요 내용

경영진은 주주 가치 극대화를 위해 현재 계획을 실행하는 것이 최선의 방안이라고 언급하는 한편, 이사회는 전략적 대안을 객관적으로 평가하는 데 열려 있는 자세를 유지하고 있다고 밝혔다. 금융 서비스, 벤모 또는 결제 처리를 지원하고, 자사주 매입 이상의 수익을 제공하며, 신뢰할 수 있는 통합 계획이 갖춰진 경우 선택적 M&A가 고려될 수 있다.

벤모에 대해 경영진은 특정 업계 벤치마크 대비 4~5배의 ARPA 성장 기회가 존재하며 향후 수년간 두 자릿수 TPV 성장이 지속될 것으로 예상했다. 주요 성장 과제로는 금융 서비스 도입 확대, 새로운 개인 간 결제(P2P) 경험, '페이 위드 벤모' 가맹점 수용 확대 등이 포함된다.

유럽 시장에 대해 페이팔은 현지 소비자 담당 팀을 구축하고 있으며 2027년에 미국의 가맹점 전략을 해외로 확대할 계획이다. 경영진은 독일과 오스트리아에서 아마존과의 BNPL 초기 모멘텀을 언급했으나, 소액 면세 폐지 효과가 지속됨에 따라 4분기 전망은 보수적으로 유지했다.

에이전트 커머스와 관련해 경영진은 페이팔의 신원 확인, 거래 내역, 소비자 보호 및 가맹점 보호 역량이 AI 에이전트를 통한 구매자, 판매자 및 결제 검증의 핵심 요소라고 강조했다.

실적 발표 전사록 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, and welcome to PayPal's Second (sic) [ Third ] Quarter 2026 Earnings Conference Call. My name is Alexandra, and I will be your conference operator today. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference. Steve Winoker, PayPal's Chief Investor Relations Officer. Please go ahead.

Steven Winoker

Thanks, Alexandra. Welcome to PayPal's Third Quarter 2026 Earnings Call. I'm joined by CEO, Enrique Lores and Chief Financial and Operating Officer Jamie Miller.

Our remarks today include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from these statements. Our commentary is based on our best view of the world and our businesses as we see them today. As described in our earnings press release, SEC filings and on our website, those elements may change as the world changes. Over to you, Enrique.

Enrique Lores

Thank you, Steve, and good morning. Today, I will discuss our third quarter progress, our multiple growth engines across PayPal and how our work on cost, technology and AI is helping us move faster and deliver for our customers. We are building on PayPal's unique strength. The trust in our brands our global scale and the power of our two-sided network while expanding beyond Checkout into Financial Services. This is an increasingly important part of our value proposition and a larger driver of our growth.

Financial Services expand our total addressable market, deepen customer relationships, increase lifetime value and allow us to become a more relevant financial partner in consumers' everyday lives. Over the past several months, we have moved quickly to simplify PayPal, clarify accountability across 3 businesses and improve our cost structure and productivity. We now have greater clarity on where our biggest opportunities are and how we will capture them. This quarter, we are beginning to see our strategy translate into financial results. We delivered a solid quarter with Transaction Margin dollars growing approximately 2% and non-GAAP earnings per share growing 8%. We also delivered [ $2 billion ] of adjusted free cash [indiscernible] important contributions to Transaction Margin dollar growth.

Branded checkout TPV growth has remained relatively stable in the 1% to 2% range for 4 quarters despite various headwinds, while there is more work to do, we're encouraged by the improvement relative to the market, continued momentum in the U.S. and strength in BNPL and Pay with Venmo. These results show that our financial performance is increasingly coming on multiple parts of the business.

Last quarter, I outlined five changes we are making to build a stronger, more diversified PayPal. We have made good progress. And today, each of our businesses has a clear plan for how it will contribute to durable profitable growth. First, Financial Services are becoming a much more important part of our business. They already represent more than 20% of Transaction Margin Dollars in 2026 and are growing double digits. For example, we continue to see good momentum in Pay Later with broader distribution this quarter through leading merchants like Amazon in Germany and Austria, American Eagle, [indiscernible] and Dick's Sporting Goods, and the momentum extends beyond Pay Later with strong growth across consumer offerings like Credit, Debit and Tap to Pay as well as Merchant Lending.

Second, we continue to build momentum in Venmo and PSP. We are building on the strength of the Venmo brand to broaden adoption of Financial Services, deepen customer relationships and increase ARPA. The Venmo Debit Card reached 6.7 million monthly active accounts up more than 55% with a record 1.6 million first-time users in the third quarter. We also relaunched the Venmo Credit Card with a differentiated value proposition that rewards customers for splitting purchases with friends. In PSP, we are strengthening our position with large enterprises and leading commerce partners through unified processing and a broader portfolio of premium value-add services, such as Risk-as-a-Service, Payouts and Merchant Lending. PSP volume grew 8%, while value-added services attached increased to 6% from [ 5% ] a year ago.

Third, we remain convinced that a consumer-led approach is the right catalyst for durable profitable growth. We have done significant work to understand how highest value consumers are, what they need from PayPal and how we can deepen our relationships with them and become more relevant in the everyday lives. Transaction Margin Dollar growth is our North Star. To drive that growth, we are placing greater emphasis on monthly active accounts and ARPA among these consumers. That means increasing adoption of Financial Services and improving retention while also making PayPal easier to find and use at the merchants where these consumers shop. Over time, our opportunity is to serve more of their financial needs with Checkout increasingly just one part of our broader relationship. This consumer-led approach also informs how we work with merchants.

As you can see on Slide 5, across many of our largest U.S. merchants, we are improving the checkout experience, strengthening [ presentment ] and partnering on consumer marketing to drive PayPal selection. Where we have implemented multiple elements of this playbook, we are beginning to see improvement in our Checkout performance. We are scaling this approach merchant by merchant and country by country.

Fourth, we are changing how we operate to drive better execution. We have clear accountability, faster decision-making and simpler ways of working. We have reduced head count by more than 2,000 and removed three organizational layers across most areas of the company. We're also using AI and automation to drive productivity. For example, our AI chat agents now support customer service across 190 countries and 6 languages and have resolved more than 24 million [ contracts ] year-to-date. Actions like this are creating capacity to reinvest in our highest return opportunities.

We are on track to achieve our target of at least $1.5 billion in gross run rate cost savings over 2 to 3 years, including more than $700 million exiting the fourth quarter.

Fifth, we are modernizing our technology and leveraging AI to innovate faster and at scale for our customers. We are making solid progress. This quarter, we migrated 7.5 billion customer records to cloud infrastructure. Our new modular risk platform is using real-time data and AI to cut credit decision times [indiscernible] in half in Canada, Italy and Spain. Venmo has started processing select payments on PayPal rails, and Venmo authentication now runs entirely on PayPal's identity platform. These are important steps toward a more unified technology foundation. We completed the global rollout of our new PayPal Mobile App built on modern architecture that will enable faster data-driven innovation. And we are building for what comes next, collaborating with Meta and other AI companies to integrate PayPal through AI personal agents and bring our trusted value proposition to Agentic commerce. We are still early in these changes. This is a multiyear transformation, and there is much more work to do, but the progress we are seeing reinforces our conviction in the strategy.

As I look further ahead, I'm increasingly confident in PayPal's earnings growth potential. Over time, we believe the changes I have described can drive sustainable total company Transaction Margin Dollar growth in the mid-single-digit range. Combined with operating leverage and disciplined capital allocation, including share repurchases, this should enable us to deliver solid double-digit EPS growth. Importantly, we are building the business to make that growth durable. The key is a more diversified contribution across the business. We expect Financial Services, Venmo and Payment Services to contribute a significantly greater share of Transaction Margin Dollar growth over time with each growing double digits.

While we expect branded Checkout TPV to improve, this algorithm does not require it to return fully to historical growth rates. The increasing contribution from the rest of the business can drive total company Transaction Margin Dollar growth in the mid-single-digit range. We also have a significant cost opportunity. There are at least $1.5 billion in savings we have identified, gives us the capacity to both pre-invest and drive operating leverage over time. And PayPal remains a strong cash-generating business, giving us flexibility to invest where we see greatest potential while continuing to return capital to shareholders. Getting there will require investment. Our U.S. playbook is showing encouraging early results. And in 2027, we plan to scale what is working across more merchants in the U.S. and internationally. We plan to invest further in both Transaction Margin Dollars and operating expenses.

We are targeting 2027 non-GAAP EPS growth similar to this year as we position the business for faster, more [indiscernible] growth over time. What gives me confidence is that many of the changes we are making are structural. We have a clear strategy, a simpler operating model and we are improving execution, and we have started to see the results.

Thank you to the PayPal team for your hard work and continued focus. Jamie, over to you.

Jamie Miller

Thanks, Enrique. Let me start with the financial performance in the quarter. At a high level, Transaction Margin Dollars came in above our expectations while operating expenses were below our forecast resulting in non-GAAP EPS above our guidance. One point I'd highlight is the tangible progress we're seeing from our transformation. That's showing up not only in the cost structure, but also in technology modernization and in the growth areas Enrique discussed, including Financial Services and Venmo. Importantly, the savings are creating capacity to self-fund more of our growth investments, such as improving the consumer experience, strengthening merchant presentment and building and scaling our Financial Services products. And as we learn what's working, we're being deliberate about where we invest more and where we pull back.

With that context, turning to the next slide, let me give you some additional color across the business. Starting with Branded Checkout, TPV growth remained relatively stable with continued improvement in the U.S. for the third consecutive quarter and stabilization in Germany. As we communicated in September, the removal of the EU de minimis tax exemption impacted select merchants and created about 70 basis points of headwind in total. In U.S. Branded Checkout, we're seeing encouraging evidence that the work on experience presentment and selection focused largely on our high-value consumers and the merchants where they shop is having an impact. Over the last 4 quarters, we have seen a significant improvement in [ relative ] share of checkout at the cohorts of merchants where we have implemented our full playbook. We also maintained strong momentum in Buy Now, Pay Later and Pay with Venmo, which outpaced the market growing 25% and 43%, respectively. We're still early, but what we're learning is increasing our confidence in the playbook and helping us be more targeted about where we invest in 2027.

On Venmo, TPV sustained double-digit growth for our eighth consecutive quarter. More importantly, engagement and monetization continue to deepen with ARPA also growing double digits, driven by strong adoption of our monetized products. We're also seeing newer cohorts ramp their product usage faster with a record number of new users activating the Venmo Debit Card within their first 30 days. Monthly active accounts using both the Debit Card and Pay with Venmo nearly doubled year-over-year, building on similarly robust growth in this cohort last year. At the same time, we're also broadening the places where consumers can use Pay with Venmo, travel and college tuition to prediction markets while maintaining strong retention across our established merchant base. That combination of greater utility, deeper product adoption and higher engagement is the model we're building toward with Venmo.

In PSP, our focus is on profitable growth, not simply volume. Braintree's TPV grew 10%, supported by profitable front book wins, high retention and expansion with existing merchants. We're also driving higher attachment of value-added services to our [ pricing ] relationships, which we expect to support margin expansion over time. Third quarter revenue grew 2% on a spot basis and 1% currency neutral with growth in Braintree and Venmo growth as well as FX favorability contributing to performance, offset in part by higher contra revenue investments made in the quarter and the de minimis headwinds mentioned earlier.

We benefited from a lower transaction expense rate due largely to mix and partner [indiscernible], lower transaction loss, reflecting our team's ongoing work to improve and strengthen on-boarding, fraud prevention and risk management capabilities and lower credit loss driven by a reserve release related to expected credit externalization and supported by disciplined underwriting. Transaction margin dollars grew 2% or 3%, excluding interest on customer balances. What's important is that we're increasingly seeing contribution from multiple areas of the portfolio while continuing to fund both Transaction Margin and OpEx investments required to strengthen Branded Checkout and grow Financial Services, Venmo monetization and PSP value-added services attach. That's the more diversified growth model we're building.

Moving down the P&L operating expenses, we're beginning to see tangible benefits from the operating rigor we've put in place and faster progress on the transformation, including increasing spans of control, reducing management roles by more than a quarter and rightsizing procurement spend. Non-transaction operating expenses grew just 1% in the quarter and helped drive non-GAAP operating income growth of 3%. That said, I would not simply annualize the third quarter expense performance. We intend to remain disciplined on costs while investing where we are seeing results, in places such as Financial Services, product growth, consumer life cycle marketing and specialized sales teams. The combination of stronger transaction margin performance and lower operating expenses resulted in non-GAAP earnings per share growth of 8% to $1.45 above our guidance.

Our cash generation remains a strategic advantage. Adjusted free cash flow, which excludes the timing impact from the origination and sale of [ later ] receivables was $2 billion. We completed $1.5 billion in share repurchases, bringing the trailing 12-month total to $6 billion. More broadly, our strong liquidity and cash generation give us the flexibility to invest in the business without sacrificing our ability to return significant capital to shareholders. That's particularly important as we look towards 2027 and selectively increase investment behind the opportunities where we're building the greatest conviction.

Turning to guidance. For the fourth quarter and the full year 2026 our year-to-date performance demonstrates continued progress across PayPal even as we execute significant organizational change with increasing clarity and confidence in the growth plans for each of our 3 businesses. With that as a backdrop, we are raising guidance for the full year.

We now expect Transaction Margin Dollars to increase to approximately $15.7 billion or $14.6 billion, excluding interest on customer balances. Mid-single-digit growth in non-transaction operating expenses and non-GAAP EPS to increase to approximately $5.60. Our guidance now includes at least $6.5 billion of adjusted free cash flow and continues to incorporate approximately $6 billion in share repurchases. For Online Branded Checkout, we continue to explore single-digit TPV growth on a currency-neutral basis for the full year, in line with our prior expectations. This assumes that headwinds in Europe, including the impact from the removal of the de minimis exemption continue to persist and result in similar 1% to 2% online branded growth throughout the fourth quarter. We remain on track to achieve at least $1.5 million in gross run rate cost savings over the next 2 years to 3 years, and are increasing our expectations exiting the fourth quarter to a run rate of more than $700 million.

As we've shared, we intend to reinvest a significant portion of these savings into our highest priority growth initiatives while improving operating leverage over time. For the fourth quarter, we expect low single-digit revenue growth on a currency-neutral basis, slight positive growth in Transaction Margin Dollars. TM$ excluding interest on customer balance to be slightly positive and flat to low single-digit growth in non-transaction operating expenses and non-GAAP EPS of approximately $1.43.

In summary, we're seeing encouraging signs that the changes we're making are translating into better performance across the business. We have more work ahead of us, but we're operating with greater clarity and discipline, and we're building a stronger foundation for more durable growth and stronger financial performance over time. I'd like to wrap up by thanking the PayPal team for everything they've accomplished this quarter.

With that, Steve, let's go to Q&A.

Steven Winoker

[Operator Instructions]

Operator

[Operator Instructions] Your first question comes from the line of Andrew Schmidt of KeyBanc Capital Markets.

질의응답

Andrew Schmidt

Maybe just start a little bit higher level, just given your prior comments about strategic alternatives, you and the Board obviously see more value than whatever offers were on the table. Could you just talk about what's driving your view of intrinsic value? And then, of course, the confidence in achieving that? That would be helpful.

Enrique Lores

Sure, Andrew. Thank you for the question. So let me share that we have strong conviction in our ability to execute the plan that we have outlined in our prepared remarks. And to achieve sustainable double-digit EPS growth in the midterm. And this will be driven by, first, sustainable mid-single-digit transaction margin growth, driven by Venmo, Processing and more modestly by Branded Checkout, all supported by the growth of Financial Services that we -- and we have highlighted how critical we think that part of the business is. We expect also to see operating leverage as we drive the cost reduction program. And of course, we will continue to utilize our strong free cash flow to drive share buybacks and, in some cases, selective M&A that will help us accelerate our plan.

But as you said, the Board and the management team have a clear objective to maximize shareholder value, and we have been and we will be open to analyze objectively any option that is presented to us, and we will always choose the alternative that will create more shareholder value. And at this point, that alternative is to execute our plan, and the team is fully focused on driving the [indiscernible] that we have outlined in the call.

Operator

Your next question comes from the line of Dan Dolev with Mizuho.

Dan Dolev

Really nice work here on the OpEx and the [indiscernible] congratulations. I wanted to talk about Venmo. It keeps growing and it looks strong, I think, in the double digits. I mean -- how can we make this a bigger part of their portfolio? And obviously, the usual question on monetization and great work again.

Enrique Lores

Sure. Thank you. I'll take the question. So our goal, as I briefly mentioned in the prepared remarks, is to make Venmo increasingly central to our customer's everyday financial life. And we are doing that by building from the strength that we see today in the business and expanding into Financial Services. The growth that we see today is driven by three things: new experiences. And for example, this quarter, we launched the ability for our customers to do P2P transfer by scanning and splitting [indiscernible] which is having very well reception by continuing to invest in Financial Services that help us to monetize better our customers. And just to mention, only 23% of our customers are using today some of the Financial Services we have today. And this quarter, we saw very strong growth of the Debit Card with more than 60% growth year on year.

And finally, we are seeing also very [indiscernible] progress on Pay with Venmo and Pay with Venmo or TPV grew more than 40% this quarter. So the growth in the future will be driven by continuing to drive these areas, and we expect to continue to see double-digit TPV growth for Venmo in the coming years. What is very exciting for us is that when we look at ARPA, that is going to become one of the key metrics of the business going forward. And we look at -- and we benchmark ourselves with other companies in our space, we have a 4x, 5x opportunity to increase ARPU, which gives us both the conviction about the opportunity and shows us where we need to invest and where we need to grow. So we expect Venmo to continue to grow, and the result just show the potential the business continues to have.

Operator

Your next question comes from the line of Tien-Tsin Huang with JPMorgan.

Tien-Tsin Huang

Just there was good color here on Financial Services. I was hoping maybe you can update us on the product road map here for Financial Services? How do you see Financial Services adding to transaction margin dollars in the near term or even the midterm and is the bias still to stay balance sheet [indiscernible].

Enrique Lores

Let me start and then maybe Jamie wants to complement some of the comments. So yes, we see -- we continue to see Financial Services as a key driver of future transaction margin dollar growth and this is why we highlighted it during the call. And this is true for all segments. So it's true for consumers and merchants, but also for the 3 businesses. Both for Braintree, for Venmo and for PayPal itself. And within Financial Services, we include things like Buy Now, Pay Later, Debit and Credit. Today and in the future, these businesses or these products offer attractive economics, they open a larger TAM and help us to complement our value proposition to customers.

In fact, as I was mentioning before, ARPA is going to become a key metric for us going forward. And we see that when consumers use Financial Services, there [indiscernible] between 2x and 5x bigger than for those consumers that don't.

[indiscernible] continued to invest in this space, for example, with Buy Now, Pay Later, we are going to be extending the portfolio of offerings that we have, both in terms of products and also in terms of geography, to continue to complement our offer in that space. We'll be offering cards that will have the flexibility of Buy Now, Pay Later, so we can extend the value proposition from online to stores. And you will see us expand the portfolio of different credits offerings that we have. So again, a very important business for us, where we see a lot of momentum and a lot of demand from our customers to offer.

Jamie Miller

Yes. And I just chime in on the funding question. We have had a balance sheet-light strategy towards credit funding over the last couple of years. And what I'd say about the next few years is we'll continue to take a balanced approach, between on balance sheet and off balance sheet growth. We have a lot of flexibility in our funding sources, and we've demonstrated that through the European Buy Now, Pay Later, the U.S. Revolve partnership we have. The U.S. [ Pay in 4 ] funding program that we have underway that we started last year. And I think what underpins that, which is really important is that we've got really strong credit underwriting and very attractive paper. So while we'll continue to use a balanced approach with both on and off in some case, retain the economics, in some cases, share those. I think what's important is we have the flexibility going forward to manage that and navigate that depending on what we're doing.

Operator

Your next question comes from the line of Timothy Chiodo with UBS.

Timothy Chiodo

I want to touch on the comments you made around collaborating with Meta and some of the other AI agents. I know from prior discussions, some of the advantages that PayPal might have would relate to the transaction history that you bring to the table. And then also back to PayPal does provide both consumer and merchant protections. I was hoping you could expand upon those or maybe other reasons why PayPal may be well positioned for Agentic Commerce?

Enrique Lores

Yes, I'll take that one. We really see Agentic commerce as a great opportunity in the company. So we really are -- make this a priority for us, both in terms of the internal work that we do and in terms of partnering with other companies such as Meta. The key advantage that is really driven by our core value proposition to consumers and merchants. When PayPal started, the key value proposition was around trust and security. This was needed in e-commerce. This will be even more -- needed more in agentic commerce. And what we are doing is translating that value proportion into the new world. If you think about consumer agents that we'll be buying from [indiscernible] from merchants, both will have to validate that this is a real consumer that can pay. This is a real merchant that has the product and that is the value that we see PayPal playing going forward. So it's really all about trust, and about the security that we will be providing both to merchants and to consumers.

And this is why we are working with all the key leaders in this space on the -- for personal agents to make sure that consumers can transact using PayPal and using AI us as kind of the key vehicle to make sure that these transactions are real. And we look at it at the beginning because what is true for commerce will be expanded to other types of the portfolio of of activities that we provide to customers like P2P or peer-to-peer transfers. All this is part of the value proposition we bring to customers. And this is why we are so excited about the opportunity that AI brings to PayPal.

Operator

Your next question comes from the line of Harshita Rawat with Bernstein.

Harshita Rawat

Can you maybe expand about the market dynamics in Europe? You have the de minimis tracks and competitive pressures in certain markets. But you're also investing in the consumer value position, things like Buy Now, Pay Later. So what's your confidence level with respect to improving brand growth in Europe? And also, Jamie, what's the expectations on the de minimis for the fourth quarter? I know you said headwinds persist, but I just wanted to kind of double check that.

Jamie Miller

Sure. And maybe I'll start with the last part of that first. Our expectation on the EU de minimis tariff impacts is that [indiscernible] into the fourth quarter. When that happened in the U.S. last year, it tended to dissipate within a few months, actually. This, we're still seeing the impacts from the tariff policy change in October and we do expect that to last through the fourth quarter. If I pull back and really look at the market dynamics in Europe and maybe I'll talk through that. And Enrique, maybe you want to talk about the invest side of it.

The core European markets outside of de minimis, really are, I would say, relatively consistent this year and to a degree, stabilizing and in some cases, improving. You look at Germany, for example, that has been stable all year for us. And I would say, as we're moving through the third quarter, I would call it slightly improving. We launched Buy Now, Pay Later in Germany and Austria over the last couple of months, and that's off to -- with Amazon, and that's off to a really nice start. The U.K. continues to be challenging, but it's been consistent this year. And Italy, [ France ] are stable and good growers. So I think what's improving is exactly your question though. We've spent a lot of time in the last 6 months with Enrique, focusing on our country-to-country approach and really strengthening our consumer teams in Europe and are now actively positioning to take the playbook that we talked about on the call with merchants into Europe next year. And all of this is really important to our continued transition in Branded Checkout. But Enrique, you may want to comment a little bit more on the investment side of it.

Enrique Lores

Yes. I think what we have done in Europe is really to invest to create the right local infrastructure, especially to manage our consumer business. We didn't have teams, local teams that understood the local trends that were [indiscernible] drive progress and activities to drive consumer demand. And this is what we have been building during the last 2, 3, 4 months, and we are starting to see the results. As Jamie mentioned, our relative performance in Europe improved. This doesn't mean that we don't have more room for improvement, which we do, and we will continue to do. But we are positive about the progress that we have seen. And especially, as we see the progress that we have made in the U.S. and we highlighted in the call, the progress that we have made with some of our key merchants, applying that same playbook in Europe to help us to drive growth and to continue to improve the performance in those countries.

Operator

Your next question comes from the line of Bryan Keane with Citi.

Bryan Keane

I just also want to follow up on international. It looks like the TPV is relatively flat, the growth on FX neutral. But the revenue growth slipped to negative 4% growth on an FX-neutral basis. It sounds like there's a lot of stability in Germany and Italy and some of the European markets. What's driving, I guess, international down further? Is there Asia markets that are weakening? And then how long will it take to get back to normalized positive growth in international as we get into next year?

Jamie Miller

Yes. So the TPV side of things, we saw some translation minor impacts there. But when you start to look at revenue and in particular, international, that's where you're seeing the impact of the EU tariffs and Branded Checkout. And you have to remember that the number I gave you on impact from the tariffs is 70 bps to Branded Checkout, that's a global number. It's not the international specific numbers. So that number is bigger when you start to apply it just to international revenue. But that's not really the primary difference there.

And then when you start to look at international, going into next year, we've been encouraged by some of the growing -- growth that we've seen. And I mentioned before across Germany, Italy, France and a few other parts of Europe. But I think more importantly the playbook that we started rolling out really over a year ago around not only experience presentment and selection, but also around Buy Now, Pay Later and really reaching into the consumer and greater penetration. While we started that in the U.S. that is moving to Europe. And you're seeing some of that with the actions we talked about with expansion of the Buy Now, Pay Later portfolio across Europe and across other places and with respect to increasing levels of penetration around the [indiscernible] book as well.

Operator

Your next question comes from the line of Andrew Bauch with BMO Capital Markets.

Andrew Bauch

I just wanted to hone-in on the '27 transaction margin dollar algorithm. I know you outlined the eventual path to mid-single digits growth. But then you also said that '27 was going to be an investment year. I guess what should we expect for the TM$ growth to look like in '27 specifically? And what are the -- like the biggest bridges between the 2% growth you're at today in the mid-single-digit target?

Jamie Miller

Okay. So let's first talk about the mid-single-digit point of view is really around our medium term, so over time point of view. And if I start with that, as Enrique talked about before, we [ expect ] Transaction Margin Dollar growth over the next coming years, a more balanced composition with Venmo, PSC and Financial Services increased growth over time. And I think importantly, it doesn't require Branded Checkout to get back to historical growth levels -- levels to really see that mid-single-digit growth. But when I look to '27, I think what I'd say first is it's a little too early for us to give '27 guidance. We'll do that at our next call in February.

But you've seen from us this year, nice performance across multiple areas. So we've seen Branded Checkout stabilization. We've seen Venmo, we've seen processing growth. And we do expect further Transaction Margin Dollar and OpEx investment in 2027 and if I level up, what we're really targeting as a profile is similar non-GAAP earnings per share growth next year what we are guiding to this year. So that's probably how I would talk about it, and '27 being relatively consistent with how we've operated in '26. We are making good progress. Our focus is on building momentum and looking at '28 and beyond.

Enrique Lores

And maybe, just let me emphasize these last two comments. We think we have an opportunity to continue to invest in the areas where we're seeing progress, whether it's transaction margin and [indiscernible]. This is what we are planning to do we think will be critical to drive stronger growth in '28 and beyond. And despite of that we expect and we are targeting to grow EPS at the same rate as we did this [indiscernible] will this year

Operator

Your next question comes from the line of Sanjay Sakhrani with KBW.

Sanjay Sakhrani

I guess when I look at Slide 5 and those cohorts that seemingly are headed in the right direction. When we look at the difference between like the first one and the last one, there seems to be a [ bifurcation ] between when you apply to a direct merchant versus a marketplace. right? So I'm just curious like what are the nuances because it seems like a lot of the technologies are implemented there. So I'm just curious, is it because the marketplace has other options for payment and that merchant doesn't. I'm just curious, as we think about the opportunity ahead and how you implement these changes, like where the opportunity is most significant?

And then just a quick follow-up, Jamie. Just as we think about the comparisons this year versus next year. It seems like the comps are much easier next year. So shouldn't we expect a little bit of an acceleration in TMD growth because the comps are easier. Or maybe you could explain sort of how we should think about it?

Enrique Lores

So let me take the first part of the question on North America. When we look at our playbook, the book has different elements. One element is to improve the experience and to get the merchants to use the latest checkout pages. Another element is to integrate in the offer Buy Now, Pay Later and some of the other Financial Services. Another element is to build co-marketing activities with the merchant. Within the graph, and we don't have the same -- exactly the same formula applied to every merchant. It depends on specific conditions of the merchant and what are the economic situation and the interest that we work with. And this is what is driving the valuation variation across the different customers that you have in the chart.

We thought it was important to share this chart because it shows the trend. And yes, there are different [indiscernible] merchant. But the important thing is how the overall TPV growth is growing and how we are also starting to grow our relative share in this [ account ]. And we have great examples of the progress that we are making, we don't specifically mention them in the call, but for example, with one of the leader U.S. sports entertainment platform where we drove and we renewed our partnership at the beginning of the year, we are seeing more than 40% growth in the last 6 months with Venmo as well growing more than 50%. With one of the leading U.S. omnichannel retailers, we expanded our Pay Later offering to them and growth of BNPL grew from 7% to 20% with significant growth of monthly active users. So we have many examples where we see that the impact of the playbook that we have invented is really starting to gain traction. And again, this is why we think continuing the investment and continuing the work is going to be [indiscernible] for us going forward.

Jamie Miller

Sanjay, when you look at, in particular, fourth quarter or 2027, I would just echo what Enrique is saying. We are really encouraged by the results we're seeing, but it's early. And we've got more work to do. And one of the things I would mention is that in the U.S., in particular, we saw nice sequential growth over the past few quarters in U.S. Branded Checkout TPV growth. So we're seeing good signs, but we also don't want to get ahead of ourselves. We are underwriting these investments generally in Branded Checkout to about a 2- to 3-year time horizon. And on the largest merchants, it really is like 3 years. So it's going to take some time for these to come through. And as we've said before, we're beginning that process in Europe, and we're excited to see where it goes and go from there.

Operator

Your next question comes from the line of Darrin Peller with Wolfe Research.

Darrin Peller

Just a quick two-part on investments in general. First, for Enrique, on M&A, just if you can give us an update again, you touched on it earlier, but your appetite for M&A in terms of size, timing and type, what you're seeing? And then really, Jamie, when we think about the investments you're talking about for next year, I mean, again, you came in strong [indiscernible] better at about 1% growth, I think, a little below what we had thought for OpEx expectations. But how should we think about margin the next year in terms of what you're building into that similar EPS profile?

Enrique Lores

So let me start on the M&A side. And I'm going to start by saying that -- our plan is to maintain our approach, significantly return capital to shareholders through share buybacks and dividend. But that over time, we believe that M&A should also play a role value creation. Any M&A action that we will do will have to go through what I call three filters. Filter#1 is strategy. It will have to support the strategies that we have outlined, for example, to drive growth of financial services or accelerate the growth of Vermo or processing. That's clearly aligned to the strategy that we have explained. Second, it needs to have strong financial case and a strong financial return. And given that share buybacks that we believe that our share is undervalued the minimum value, of course, will have to be -- provide more value than just buying shares, even [indiscernible] the model that we have.

And third and very important, we need to also have a very strong operational plan, and we'll have to have the conviction and the plan that we'll know how to impact the company and how to extract the value that the financial case will bring. So these are the three filters that we will apply in any case. We will remain very disciplined. But with M&A, we can accelerate the plan that we have been discussing today.

Jamie Miller

Great and then Darrin, with respect to 2027 investment, I guess what I'd say is we've had nice performance in the third quarter, and it was much better than we expected, and we expect to have a good profile in this -- in the fourth quarter as well. But I would not run rate the second half OpEx across '27. While we're off to a really strong start, we are ramping investments along the lines of a lot of the things that Enrique and I've talked about here product build, market build, marketing and other things of that. And I think one of the things you're going to see is it's hard to fully synchronize the pace of the cost out with the pace of the investment, and you are going to see some mismatch across the quarters. But overall, if I look at the '27 profile, when you look at transaction margin, when you look at OpEx, when you look at EPS, like I said before, we expect a roughly consistent profile, and we'll unpack that and get into more specifics on the call in February.

Operator

Your next question comes from the line of Dan Perlin with RBC Capital Markets.

Daniel Perlin

I wanted to just hit on PSC for a second. It sounds like part of that strategy is to continue to drive higher attach rates for value-added services. So I guess the first part is just what does that sales motion look like as we sit here today happy to invest in that going forward? Or are you kind of where you want it. You just need to push it harder.

And then I thought I heard you say the percentage of that was high single digits. So if there's any clarification on that, that would be great.

Enrique Lores

So let me take the first part. So in PSP, what we need to do and [indiscernible] with the biggest opportunity is from one side to continue to drive growth or what I would call the basic processing capabilities and we've been making very good progress and making it profitable during the last few quarters, but also to improve attach of value-added services. Services like Payouts or Risk-as-a-services, our Risk-as-a-Service or Invoicing. These are all great services that provide a lot of value to our customers -- and either we have not been able to attach them properly or we have not been able to monetize them properly during the last quarter. And that's going to be a key priority for us going forward.

We are investing not only in the products themselves, but especially in a specialized sales force that will drive an attach that will have a unique code to improve attach and to help value-added services. I want to acknowledge that we have started to make progress. We grew our attach from 5% to 6%, so year-on-year, 1 point, but we have much more room for improvement, and this is where we're going to be focused.

Steven Winoker

Alexandera, we have time for one last question. Can we just put one more in, please.

Operator

You got it. Your last question comes from the line of Jason Kupferberg, Wells Fargo.

Jason Kupferberg

So nice to see some of the broad-based stabilization. Obviously, pockets have improved in the business. I did want to come back to the topic of branded growth. I know we're talking about Q4 being in this kind of steady 1% to 2% range, and you are assuming that the EU tariff headwinds continued, but you did also talk about some U.S. momentum. So just curious why Q4 wouldn't potentially accelerate? I know you've got a materially easier compare? And maybe if you can just quantify some of the U.S. acceleration and recent [indiscernible] that would be great.

Jamie Miller

Sure. I mean the short answer on the fourth quarter is that we expect the EU tariff headwind to continue. And we're really planning for consistency -- if I unpack that a little bit, the forecast is really based on our view of historical performance, and our view of the market. And the holiday season is more heavily retail, but we have a really good and strong depth in services, travel and some of the other verticals. And we've got really good growth rates in areas that we're deep.

But the EU de minimis, we assume that continues to impact us. As I mentioned before, Europe has been consistent year. But it's an area we're watching with some of the macro [indiscernible] and the EU de minimis that I mentioned. And we're really encouraged by the U.S. merchant playbook work we've done, and we do believe that we're entering the holiday season better position than we were last year at this time. But it's all still very early, and we've got more work to do ahead. And I would just say that as we take it all in, that's what's leading us to the guide around the 1% to 2% for fourth quarter.

Steven Winoker

Enrique, any final thoughts?

Enrique Lores

Yes. I want to close by first acknowledging the progress that we have made so far. Last quarter, we outlined five key priorities for the company, and we are making progress in all of them. We have talked about the progress we have made in Financial Services that are growing double digit, and especially around areas like BNPL is showing really our ability to expand and to grow in this area. Second, we have talked about the progress we're making with Venmo and PSP, significant growth, both on revenue and transaction margin and great plans to continue to drive that going forward. Around Branded Checkout, the business has stabilized. We have a clear view, work is a playbook that we need to apply to continue to drive growth and especially centered around high-value customers, we see the -- what we need to do, and we are going to continue to do that in the coming quarter. And finally, both from cost amplification and embracing AI, we have made tangible progress as the results show.

So good progress made in Q3 that show that we are in the right direction, more work, too. But thank you to the PayPal team and also thank all of you for participating with us today.

Operator

Thank you. This concludes today's conference. Thank you for participating. You may now disconnect.