PayPal Holdings last night reported a better-than-expected 18.1% rise in quarterly revenue and its margin forecast allayed concerns over costs associated with its payment network deals with MasterCard and Visa. 

The payments processor said that it expects adjusted operating margin to be stable or higher in the next three years. 

PayPal signed deals with Mastercard and Visa earlier this year for store payments, leading to some concerns that they would result in higher transaction expenses for the company. 

PayPal last night also raised its revenue growth forecast for a three-year period to 16-17%, from its previous guidance of 15%.

The California-based company's active customer accounts rose 11% to 192 million in the third quarter, beating the average analyst estimate of 191.6 million, according to research firm FactSet StreetAccount.

Total payment volumes surged 25% to $87 billion. 

However, PayPal's transaction margins, which have been steadily declining for the last five quarters, fell to 58.7% from 59.8% in the second quarter. 

In its second stint as a public company, PayPal has witnessed rapid growth in a number of services such as person-to-person payment app Venmo and Braintree, a payment gateway used by larger merchants. 

Payment volumes at Venmo surged 131% to $4.9 billion in the third quarter. In the preceding quarter, they soared 141%. 

PayPal processed 1.5 billion transactions in the latest quarter, slightly lower than the average estimate of 1.52 billion.

The company, spun off from e-commerce company eBay last year, said its revenue rose to $2.67 billion in the quarter ended September 30, from $2.26 billion a year earlier. 

Analysts on average had expected $2.65 billion, according to Thomson Reuters I/B/E/S. 

Excluding items, the company earned 35 cents per share, in line with analysts' average estimate.