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PayPal Profit, Revenue Rise as It Looks to Stand Out in Crowded Payments Sector

PayPal Holdings Inc. said it is expanding newer services such as Xoom and Venmo as it seeks more ways to stand out from a bevy of emerging mobile payments tools.

The San Jose, Calif., company’s shares rose about 2% in after-hours trading, after it announced that its total payments volumes were $81 billion for the quarter, up 29% from a year ago, and ahead of analyst expectations of $79 billion for the quarter.

PayPal revenues also grew, but more slowly. Revenue in the first quarter was $2.54 billion, up 19% from a year ago, and just ahead of analyst forecasts of $2.5 billion.

The payment company’s businesses contain its core online and mobile e-commerce payments tools, and newer businesses like Xoom and Venmo that it has acquired in recent years.

Excluding certain items, PayPal posted per-share earnings of 37 cents, up from 29 cents a year earlier, on a pro forma basis, and above the average analyst estimate of 35 cents, according to Thomson Reuters.

Since its separation from eBay Inc. last year, PayPal has sought to find new ways to both expand its overall usage and defend its pricing power as it faces off against an expanding array of payments options for consumers, such as from Apple Inc.’s Apple Pay to online checkout tools from Visa Inc. and MasterCard Inc.

“Larger merchants have much more volume, and therefore get a lower price,” said PayPal’s chief executive, Dan Schulman, in an...