The purchase of a broker-dealer by PayPal is said to have been discussed, although it is doubtful that the broker-new dealer’s investing program will be implemented this year. PayPal, the American payment giant, started cryptocurrency trading last year and is now exploring options for expanding its services to include stock trading as well.
PayPal is considering acquiring or forming a partnership with a broker-dealer to compete with the crypto-friendly stock trading program Robinhood, according to a report published on August 30 by CNBC.
As reported by the article, PayPal has conducted discussions with potential industry players about introducing a new investing service, though it is unlikely to do so this year, according to unnamed sources. According to a report by CNBC, the Financial Industry Regulatory Authority might take more than eight months to license PayPal as a brokerage firm.
The brokerage giant PayPal has already chosen industry veteran Rich Hagen as the new CEO of its subsidiary, “Invest at PayPal,” which was previously unknown, according to accusations made by the media. According to Hagen’s LinkedIn profile, he will be responsible for “exploring possibilities in the consumer investment market” for PayPal.
Ally Invest, which was founded by a former president and co-founder and which acquired the brokerage firm TradeKing in 2016, is a licensed brokerage business. Aside from being the new PayPal president, he also founded TradeKing and served as the company’s president until 2005.
The long-term goal of PayPal CEO Dan Schulman to provide additional financial services, such as “investment capabilities,” is believed to be aligned with the company’s desire to start a stock trading firm, according to reports.
PayPal’s new product vision had previously been disclosed during the company’s investor day in February, and the CEO made a second announcement on the subject at the opening of the conference, bringing the total number of announcements to four.
According to TradingView, PayPal shares climbed 3.6 percent as a result of the news, while Robinhood’s HOOD stock plummeted more than 6 percent on the announcement. Robinhood said in early August that crypto trading contributed 41 percent of the company’s income in the second quarter of 2021.