“As we have discussed, later this year, we plan to externalize a significant portion of this portfolio, reducing our balance sheet exposure as securing a long-term partner to support sustainable and healthy growth.”

In context

“uentially. Transaction expense as a rate of TPV came in at 93 basis points, 5 basis points higher than Q1 last year. This increase was primarily driven by 30% growth in our unbranded processing volumes. These volumes grew approximately 3x faster than our overall TPV growth. As a result, transaction expense dollars grew 17%. Transaction loss as a rate of TPV was 8 basis points for the quarter, a 2 basis point improvement versus last year. Transaction loss dollars declined 7%. Our ongoing risk mitigation activities and our mix of volumes drove this improved performance. Credit losses were $142 million or 4 basis points as a rate of TPV. We ended Q1 with $7.5 billion in net receivables, flat sequentially. Originations were primarily driven by the strength of our Buy Now, Pay Later franchise. As we have discussed, later this year, we plan to externalize a significant portion of this portfolio, reducing our balance sheet exposure as securing a long-term partner to support sustainable and healthy growth. Our reserve coverage ratio increased sequentially to 7.8% in Q1 from 7.4%, reflecting growth in the consumer receivables portfolio and some deterioration in our PayPal business loans portfolio. Relative to Q1 2022, our reserve coverage ratio improved 50 basis points. Similar to the broader industry, overall, we're seeing a normalization of our credit portfolio to pre-COVID delinquency levels. We continue to be pleased with the quality and diversification of our credit portfolio and are closely monitoring the macroeconomic environment while making appropriate adjustments to ensure we continue to perform within our internal risk appetite. Continuing the trend from 2022, growth of unbranded processing volume outpaced growth in branded volume, resulting in slower transaction margin dollar gro”