PayPal exploring a stock-trading platform that may take on Robinhood
Payments giant PayPal is reportedly exploring the launch of a stock-trading platform for its US customers that could take on Robinhood.
The San Jose, California-based company is exploring ways to let users trade individual stocks, CNBC reported, citing two people familiar with the plans.
To help with the plan, PayPal this month hired brokerage industry veteran Rich Hagen, a former president at Ally Invest.
According to Hagen’s LinkedIn page, Hagen is now CEO of a new division of PayPal called “Invest at PayPal,” which is responsible for the company’s “efforts to explore opportunities in the consumer investment business.”
The move could signal that PayPal, has more than 400 million accounts worldwide, is getting serious about its efforts to allow users to invest their money in the PayPal ecosystem.
Last year, the company announced it would let its users buy, hold and sell cryptocurrency directly from their PayPal account, and executives have said they want to branch out into other financial services.
At the company’s Investor Day in February, CEO Dan Schulman emphasized that the company wanted to roll out new capabilities either on its own or through partnerships.
“If somebody is going to be putting their money onto our platform, we want them to be able to grow that money, to invest that money in not just things like crypto, but in individual stocks and other assets that we can digitize and allow people to invest in,” he said.
PayPal’s interest in enabling stock trading comes amid an explosion in retail trading that’s been driven by the COVID-19 pandemic, commission-free trading apps like Robinhood and a historic build-up in US household savings.
PayPal’s entrance into the space could spell trouble for the upstart incumbents already catering to retail stock traders.
PayPal’s size dwarfs Robinhood, for example, which has seen eye-popping growth in recent months, reporting more than 22.5 million customers as of the end of the second quarter, up more than 130 percent from the same time a year ago.
It’s unlikely that PayPal’s trading service will roll out this year, CNBC reported, citing one of the sources, and the company has held discussions with potential industry partners.
Shares of PayPal rose about 3 percent on the news, while Robinhood stock dropped more than 4 percent.
