PayPal Here

EBay reported significant growth for its online payments service PayPal today.

PayPal saw 117.4 million active registered accounts for the third quarter of 2012, 14 percent higher compared to the same period last year. Its  revenue was also 23 percent higher for the quarter compared to last year, as was the total payment volume, which was up 20 percent to $35.2 billion.

Part of this growth comes from eBay’s three-pronged approach to growing PayPal offline. Not only is the company integrating its payment service directly with retailers using existing point-of-sale technology, it’s also partnering with Discover to gain access to its 7 million retail locations. There’s also eBay’s new PayPal Here mobile payments service, which targets smaller retailers and competes with Square.

“We’re only beginning to scratch the surface,” said eBay CEO John Donahoe in reference to PayPal during today’s earnings call.

The basic idea behind the company’s offline approach to growth is that it gets more people using the service in real-world situations, paying for goods and services through PayPal by using their mobile phone number and a pin. Donahoe said this approach has been highly effective in international markets and that the company expects double-digit growth (both in customers and revenue) in the future.

It’s successful third quarter doesn’t, however, mean that PayPal will continue operating internally as is. Donahoe hinted that PayPal could experience some restructuring in the future, resulting in layoffs. The restructuring involves combining PayPal’s nine product divisions into a single unit for the purpose of speeding up product development.

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