(Reuters) -PayPal ( PYPL ) raised its full-year profit forecast above Wall Street estimates on Tuesday, as the digital payments giant's push to revive growth in high-margin businesses such as Venmo and U.S. checkout begins to pay off.

Under CEO Alex Chriss, PayPal ( PYPL ) has shifted its focus to profitability rather than chasing top-line growth. The company is trying to regain momentum in parts of its business that lost steam after the pandemic-era e-commerce boom faded and competition intensified.

PayPal's ( PYPL ) Venmo, a platform that has become virtually synonymous with peer-to-peer payments in the U.S., posted revenue growth of 20% for the second quarter. The unit's total payment volume growth accelerated to its highest rate in three years.

On a per-share basis, the payments firm now expects an adjusted annual profit in the range of $5.15 to $5.30 versus its prior expectations of $4.95 to $5.10. Analysts on average had expected $5.10, according to estimates compiled by LSEG.

But PayPal's ( PYPL ) shares fell 1.2% before the bell after the company guided to a current-quarter profit that was in line with Street views and roughly flat from a year earlier.

PayPal ( PYPL ) expects third-quarter adjusted profit in the range of $1.18 to $1.22. At the mid-point of $1.20 per share, it matches Wall Street expectations.

Transaction margin dollars - the profit PayPal ( PYPL ) makes on each transaction after covering direct costs - grew 7% to $3.8 billion in the quarter.

The increase reflects an ongoing push to drive higher-margin volumes across the company's branded checkout products and streamline costs tied to unbranded processing.

Adjusted operating margins expanded 132 basis points to 19.8%.

Margins have been a key source of investor concern in recent years, amid fears that Big Tech rivals such as Apple Pay and Google Pay are chipping away at PayPal's ( PYPL ) market share.

While the company long held a first-mover advantage in digital payments, that edge has diminished, though PayPal ( PYPL ) has previously pushed back against concerns that its market share is under pressure.

SPENDING HOLDS UP

Meanwhile, U.S. consumers have continued to spend despite a mix of economic pressures, including persistent inflation and the threat of new trade policies, easing concerns about a potentially sharp pullback in transaction volumes.

Analysts say some shoppers are also buying early to avoid expected price hikes from tariffs later this year.

That resilience has helped PayPal ( PYPL ) and major U.S. lenders sidestep early worries that trade tensions could weigh on spending in the second quarter, even as lower-income households show signs of strain.

Total payment volume - which tracks the total value of transactions handled by the platform - increased 6% to $443.5 billion.

Adjusted profit came in at $1.40 per share in the three months ended June 30. That compares with $1.19 per share a year earlier.

PayPal's ( PYPL ) second-quarter net revenue climbed 5% to $8.3 billion.