Paypal prepares platform for retail investors to compete with Robinhood
Paypal is considering launching an investment platform, initially, in the United States, according to CNBC’s website. The initiative is being developed from a new business unit of the operation, named Invest at PayPal.
To run the division in question, PayPal has hired Rich Hagen, an industry veteran who has, among other credentials, the founding of the online brokerage TrakeKing, bought in 2016 by the Ally Financial group, for $275 million.
On his LinkedIn profile, Hagen, who joined PayPal in August this year as CEO of Invest at PayPal, describes his role as “leading PayPal’s efforts to explore opportunities in the retail investment business.”
The new project finds a justification in the boom of individuals investing in the American capital market. According to consultancy JMP Securities, the segment gained more than 10 million new investors in the first half of this year alone.
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On its way to launching this offer, PayPal will encounter names like Robinhood, an app that made its name for its mantra of democratizing investors’ access to the capital markets and that raised $2 billion in its IPO, held at the end of July.
The segment also includes rivals such as Sofi and Square, a payments company led by Jack Dorsey, founder of Twitter. The company offers the option to trade shares and cryptocurrencies.
According to sources close to the company, it is unlikely that the service in question will be launched this year.
With 403 million active accounts worldwide, PayPal reported net income of $6.2 billion in the second quarter of 2021, up 19% from the result released a year earlier.
Valued at $338.9 billion, PayPal closed today’s trading session on Nasdaq with its shares quoted at $288.47, which represented an appreciation of 3.64%.