Trade-in PayPal platform can be a significant source of income.
PayPal (Paypal) shares increased dramatically by 3.6% on Monday after CNBC stated that the company “examines” the possibility of launching his platform for trading shares and pointed to the appearance of the Invest At Paypal division in Fingers, which headed Expert Brokerage Industry, Rich Hagen.
Suggests that PayPal is preparing to implement its plans to “add opportunities for investing in stock” to its platform, as announced by its leaders last month.
For details about the future new PayPal service, sources in the media report that the stock trading service will be launched first in the United States and probably not earlier than 2022.
Be that as it may, this is an excellent growth opportunity for PayPal, the total user base of which amounted to 392 million as of March 31.
Previously, Dan Schulman, the gene. PayPal director stated that the company plans to “go beyond the limits of payment functions” and seeks to become similar to such “super-applications” as: Chinese Giants Alipay or Wechat, Indian PayTM, or Singapore Grab to turn PayPal into a “Universal shopping store and finance.”
Among the future new services were called: high-yield savings accounts, checks for checking checks, and the possibility of investing in a stock.
Last year, PayPal launched the PayPal Cryptocurrency application in the United States to buy, storing and selling cryptocurrency; in the UK. It includes four cryptocurrency operations: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The obtained results of PayPal Cryptocurrency show the increase in the involvement and income of the user.
At the same time, PayPal lags behind its competitor Square (SQ), which already offers trading both cryptocurrency and shares through the Square Cash application.
Trading with promotions in the application from the “Invest At PayPal” division can also significantly contribute to the development of the company’s business, given the historical rise in the stock market, which occurs after a short-term sharp decline last year.
Demand may be very high – this by an example of a RobinHood online broker (HOOD), which showed a massive increase in users and income due to a record increase in the number of retail investors.
Market experts point to the simplicity of the RobinHood application, the incredible growth of the “Mem-shares” (such as Gamestop), cryptocurrency, and additional subsidies to the population in the United States as critical factors, why so many beginner traders appeared on the market.
According to JMP Securities, more than 10 million new individual investors came to the market in the first half of this year, which roughly corresponds to last year’s record level.
According to CNBC, to offer customers trading shares, perhaps Paypal will become a partner or buy an existing broker-dealer. Sources report that PayPal has already negotiated with potential industry partners.
If Paypal has plans to get a license from a brokerage company, the company will need to approve from FINRA regulating the body. This process can take over eight months.
A significant negative factor for PayPal remains intense competition in the industry – in addition to Robinhood, more than a dozen companies providing investors with zero or very low commissions for trade in the stock market.
At the same time, compared with Robinhood, which had to stop trading due to the requirements for liquidity by regulatory authorities, Paypal has no negative reputation in this area, and the company may prove itself better.
