PayPal on Thursday showed strong growth in its online payments business, meeting Wall Street expectations on earnings and announcing a new partnership with Visa that is expected to bring a significant revenue increase.

PayPal posted second-quarter earnings of 36 cents per share, in line with analysts’ expectations, and revenue growth of 15 per cent to $2.65 billion.

The company also unveiled a partnership with Visa – a deal for which investors had been eager – intended to make it easier for PayPal customers to use Visa credit cards in their transactions and allow shoppers to use PayPal in brick-and-mortar retail locations.

“A collaboration between PayPal and Visa could present a formidable obstacle to Apple Pay and Google Wallet,” said Charles King, principal analyst at Pund-IT.

PayPal shares were up about 2 per cent in after-hours trading after closing at $40.13 on the Nasdaq.

– Reuters