Payments giant PayPal is planning to introduce stock trading into their mobile app. With this new feature, customers can trade individual stocks on its platform.
DURING THE INVESTOR DAY PRESENTATION, PayPal CEO and President Dan Schulman stated that the firm plans to drive up product offerings. This includes “high yield savings accounts, direct deposit, and investment capabilities.”
Industry veteran Rich Hagen will head PayPal’s new venture. They posted regarding this on LinkedIn. Hagen is the president of Ally Invest for about three years. Also, he is the co-founder of the online brokerage TradeKing.
According to Dan, PayPal is looking to partner with an existing broker-dealer for offering trading services. He added:
“There may be some of these financial services we do organically internally, but a lot of these will be done in 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.”
While PayPal’s ambitions are pretty high, the payment giant is entering a highly competitive market. However, the online brokerage market is flourishing tremendously. According to J.D. Power, more than 10 million new brokerage accounts in 2020. Moreover, retail investors entering the markets via online platforms skyrocketed during the pandemic.
Looking at this, PayPal is trying to capitalize on its already extensive user base to opt-in for stock trading through its interface. This strategy is quite the opposite as many leading fintech started with wealth products and shifting focus to banking solutions.