PayPal Holdings Inc.’s revenue increased 19.2% to $2.544 billion in the first quarter that ended March 31 from $2.134 billion in the prior-year quarter, the payment processing company reported Wednesday. Excluding the impact of foreign exchange rates, revenue grew 23%.

U.S. revenue increased 30.6% to $1.343 billion from $1.028 billion in the same quarter a year ago. International revenue grew 8.6% to $1.201 billion from $1.106 billion a year ago. Excluding the impact of the strong dollar that reduces the value of foreign revenue, international revenue grew 15%.

PayPal generates revenue from transaction fees charged to consumers and merchants as well as from fees from other services such as PayPal’s credit loans and subscription fees. Transaction revenue represented 88% of total revenue in Q1. 80 of the Top 500 retailers in North America use PayPal as their payment processor, according to Top500Guide.com. In addition, 235 of the Top 500 accept PayPal payments at checkout.

“While PayPal historically emphasized its consumer brand over business services, the company has 10 million merchant partners worldwide that benefit from meaningful improvements in conversion rates and sales volumes by integrating PayPal,” Colin Sebastian, analyst at Robert W. Baird, wrote in a note to investors. “On average, PayPal customers spend two times non-PayPal customers. From a merchant’s perspective, PayPal now provides an end-to-end payment platform, differentiated from the closed platforms or limited breadth of other online and traditional payment companies.”

Venmo, PayPal’s mobile peer-to-peer payment app, processed $3.2 billion in total payment volume, up 154% year over year, the company says. Venmo is a mobile wallet that lets consumers split payments. PayPal plans to expand its Pay with Venmo service—which allows consumers to use Venmo to pay in mobile apps—to more consumers and merchants later this year.

During the quarter, the company launched PayPal Commerce, a set of tools that allow merchants to sell via email, social networks, blogs, articles, advertisements and in mobile apps, routing payments to PayPal. PayPal Commerce is still in beta, the company says.  

For the quarter ended March 31, PayPal also reports:

• Active customers grew 11.5% to 184 million from 165 million in the same quarter a year ago. Active customers are those who sent or received at least one payment or payment reversal in the past 12 months.
• The number of transactions processed increased 25.9% to 1.414 billion from 1.123 billion.  
• Net income rose 43.1% to $365 million from $255 million.