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Venmo, Amazon Partnership Briefly Buoys Share Price Before After Market Trim

Customers will be able to make purchases on Amazon.com and the Amazon mobile shopping app using their Venmo accounts in 2022.

Payments giant PayPal  (PYPL) - Get PayPal Holdings, Inc. Report said it will enable U.S. customers of retail and tech giant Amazon  (AMZN) - Get Amazon.com, Inc. Report to pay using its popular payments app Venmo from next year.

Shares of PayPal closed 1.61% higher at $231.76 on Monday. Shares of the San Jose, Calif., company were trading 4.98% lower in after hours trading.

Customers will be able to make purchases on Amazon.com and the Amazon mobile shopping app using their Venmo accounts starting in 2022, PayPal said.

Venmo has over 80 million users in the U.S.

"This is obviously a very significant effort in our Venmo monetization efforts,” President and Chief Executive Dan Schulman told cable news network CNBC in an interview. 

Schulman also told CNBC that PayPal was "no longer constrained by the contractual obligations of the eBay operating agreement.”

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The announcement was made as the company reported better-than-expected third quarter results for the three months ended Sept. 30.

PayPal reported net income of $1.09 billion, or 92 cents a share, compared with net income of $1.02 billion, or 86 cents a share, in the same quarter next year.

Non-GAAP earnings rose $1.11 a share from $1.07 a share in the year-ago quarter and exceeded analysts' estimates of $1.09 a share. 

But a trimming of the company's expected revenue and earnings per share ultimately pressured the stock lower.

Revenue rose 13.3% to $6.18 billion from $5.45 billion in the same period a year ago, but missed analysts expectations of $6.23 billion.

"The strength of PayPal’s two-sided platform and ubiquity in our core markets has set us up to grow at scale, expand our work with existing merchants and attract new partners," Schulman in a statement.