— we did 100 A/B tests in the first quarter. We did 200 A/B tests and incremental 200 in the second quarter. We’re going to do another $200 million coming here in the third quarter. And in general, about 30% or so of those AB tests that we run actually create positive benefit coming out of them. What that means is we’re going to have like 150 or so improvements in checkout in our digital wallets running through our metrics as we go through. And some of those are 1 or 2 basis points difference. Some of those can increase DPA by 10 or 15 basis points. And when you put all of those together, it’s extraordinarily powerful, and we are definitely seeing that in our results. We also are beginning to see a lot of our merchants move to our latest integrations.
We know that when we’re native in app on the mobile that we hold or gain share. We talked like a quarter or 2 ago, about 33 of our top 100 merchants had our latest checkout integrations, and we had an aspiration to be at 50 by the end of the year. I’m pleased to report that now 43 of our top 100 merchants are on our latest checkout integration. So we’re making really good progress around that. We’re not — we’re not about doing just like the basics. We are approving availability. Latency has now improved by 45% year-over-year. Every couple of milliseconds increases conversion rates on that. And passwordless is really important for us. And the rollout of Pass keys, some other authentication methodologies that we’re using now ex the EU, which has SCA strong customer authentication, we’re at about 70% of our checkouts that are passwordless.
That’s going to continue to go up as we push tasks, and we’re now taking Paskes into the EU, which will be very beneficial because you can actually take out the friction of SCA in those conversions as well. And so we’re going to push that really hard. And then you see all the other big initiatives that we’re doing, the pre-introduction preapproved amount for buying — by the way, in the U.S., we’ve rolled that out to 60 million of our customers. We are seeing 25% to 30% increase in first-time users of Buy — now Pay Later and those are using it 5% to 10% more in terms of the overall TPV than those that didn’t have the preapproved amounts. And we’re going to roll out another $50 million preapproved into the EU beginning of this quarter. We’re taking our rewards up, our rewards and cash back.
We saw a 20% increase in the number of people using it from Q1 to Q2. We’re now up over 10 million people using our rewards when they use our awards, their TPA goes up by 32%. So these are some of the things that we’re doing that are making a big difference. We’ve got a lot of things planned for Q3, and we’re beginning to see it in the results and hope to be able to continue to point that out and continue to highlight what we hope to be increased growth in branded checkout.
Operator: Your next question comes from the line of David Togut with Evercore ISI.
David Togut: Could you provide an update on your cost takeout plan for 2023, the progress you’ve made? And do you have any preliminary thoughts quantifying how OpEx reductions will carry into 2024?
A – Daniel Schulman: Yes. Thanks, David. I’ll start and then probably Jens will jump in on this. Look, we’re going to continue to do surgical discipline in our cost structure. — down 11% and in Q2 for the full year. We still expect that to decline consistent with what we talked about by 10%. And therefore, when we think about our operating margin expansion coming up by at least 100 basis points and some of that incremental pressure that we’re absorbing on the credit side that as Gabi mentioned, we’ll kind of move through our numbers by the end of the year. You’re obviously seeing growing margin expansion driven by some of the top line enhancements we’re doing not just the cost discipline that we’ve demonstrated. I would just say that this is not just about efficiencies, but this is about doing things faster and accelerating the velocity of our innovation.
— it’s not about trade-offs. It’s about lower cost, but higher performance. And you’re seeing that because I look at our MBS being at 7-year highs. Look at the amount of innovation that we’re now pumping through the system right now. We’re getting more done more efficiently. There’s no question that AI is going to impact every single company and every function just as it will inside of PayPal. And we’ve been experimenting with a couple of hundred of our developers using tools from both Google, Microsoft as well as Amazon. And we are seeing 20% to 40% increases in engineering productivity. Just imagine that in terms of how much more product we can get into the market and how efficiently we can do that. And I think we’ve always known and anticipated that AI will drive productivity improvements really for foreseeable future.
