And what we’re really encouraged by is the strengthening profile of the business. We’re actually starting to see the benefits of our initiatives as we get through some of the noise from lapping, we do expect to see improving transaction profit growth. When we think about the back half in Q3, we’ll still see some pressure on transaction margin performance. In Q4, we expect to see an improvement. And then over the longer term, our TM profile in the future will certainly be benefited by the acceleration in branded checkout by e-commerce acceleration by the improved cross-border trends that Dan referred to as well as from the value-added services that we’re adding on the PSP side.
Darrin Peller: That’s really helpful. So it sounds like some of these initiatives are third, fourth quarter events, but they could move needle starting them.
Gabrielle Rabinovitch: We expect to exit the year in a much stronger position from a TM trajectory than where we are right now.
Darrin Peller: Okay. Very good. Thanks. Guys.
Operator: Your next question comes from the line of James Faucette with Morgan Stanley. Your line is open.
James Faucette: I wanted to follow up on Darrin’s question. I know that unbranded seems to be a drag or dilutive to margins right now overall, which is a little bit surprising given just kind of how margin structure tends to be throughout the industry. I know you’ve talked a little bit in the past about adding incremental services to unbranded that could improve that structural margin component in on branded. Can you talk a little bit about what that may look like, timing and if any of those initiatives are will play a role in improving the transaction margin that you’re looking at for the latter part of this year? Thanks.
Gabrielle Rabinovitch: Yes. I’ll take a crack at that, James. Thanks for the question. Our PSP business does continue to go from strength to strength. — as we talked about our overall TPV was nearly 30% in the quarter. And that’s despite, as Gabriel mentioned, deprecating some of our older PSP flows, things coming off of our PayPal Pro. We actually migrated about $5 billion of TPV from our legacy stacks onto PPCP in this past quarter. And so it’s a bit of a drag in the quarter, but we’re going to be done with that by the end of the year. And we continue to win marquee accounts in the business, whether that be booking.com, meta, Allstate insurance, these are big accounts that we are winning because winning PSP is a strategic imperative for us.
It allows us to have our latest checkout experiences with the largest, most important merchants in the world across PayPal, Venmo and by now pay later. We captured 100% of the data flows, which really is feeding our AI engines. It’s fueling what will be our next-generation checkout. And most importantly, it’s fueling kind of our ability to have best-in-class authorities in the industry and the lowest loss rates in the industry. In terms of the higher-margin services that we’re going to be putting out there, — we are seeing a lot of traction on that right now. For instance, we are moving into in-store. That’s always been an area of opportunity for us. We are now fully implemented with 20 marquee merchants in over 1,000 in-store locations, over 2,500 POS systems will continue to do quite well there and push significantly in that.
We’re making good progress in selling things like payouts, risk-as-a-service, disputes, automation. We’re seeing our largest customers begin to adopt that right now, whether it be Chen or meta or Tiktok, really, these are some of the bigger clients that we have adopting our value-added services — and I’ll just give you one example. We just started doing orchestration in 6 additional LatAm countries with much higher margins and where we’re doing that orchestration for our largest customers, we’re seeing like a 190 basis point off rate improvement. So you’re seeing kind of this win-win as we’re doing this. And then, of course, PPCP, as it goes down market is a much higher margin product for us. Yes, I talked about all of the channel partners that have already implemented that or in the middle of implementing, and we’ve got another 25 more partners by year-end in the U.S. another 15 EU partners by year-end.
So we’re seeing a tremendous amount of scaling on that. We’ve also enabled here in the U.S. 1.2 million SMB merchants to basically do a one-click migration into PPCP, — we’ve already done all the risk assessment for them. They’re on the right platforms for us to be able to seamlessly transition them onto that platform. So I think we’re going to see a large amount of volume moving into PPP. That’s obviously higher margin, high value-added services on branching will also help. And those will develop over time. Clearly, every quarter, they will add and some cumulative total will start to feel as we kind of exit the year and certainly as we go into 2024 with that. I hope that helped…
James Faucette: Thanks.
Operator: Your next question comes from the line of Ramsey El Assal with Barclays. Your line is open.
