PayPal Seeks to Enter Stock Trading to Compete with Robinhood


PayPal may soon become a competitor to Robinhood, the free stock trading app that has seen an increase in its use during the pandemic.

The online payments giant recently started allowing users to buy and sell cryptocurrencies, like Robinhood, and also wants to compete with Affirm by allowing customers to purchase items online using installment funding.

Trading applications – CNBC was the first to report PayPal’s interest in stock trading and confirmed that he recently hired the founder of an old investment platform to lead a new division called Invest at PayPal. PayPal would not confirm whether this division is exploring equity trading, however.

Robinhood went public in July and is now valued at nearly $ 40 billion. In its first earnings report, the company said its revenue for the second quarter of 2021 was $ 565 million, up 131% from the previous year. The company has faced controversy for its casino-style app interface and for allowing inexperienced people to perform complex transactions that they might not fully understand. It has also been criticized for the way it is able to offer free exchanges – essentially a third party company executes transactions on behalf of Robinhood users, and that company can match buyers and sellers so that they can profit from the difference. . Securities and Exchange Commission regulators rate this as a conflict of interest because Robinhood may not be offering users the best price.

Despite concerns, Robinhood supporters say the company’s easy-to-use app has encouraged more Americans to get involved in the stock market, which has traditionally seen the lion’s share of profits go to wealthy investors and “Sophisticated”. The unexpected rise in stocks like GameStop and AMC were seen as ordinary people collectively declaring that they would no longer tolerate the status quo.

Falling behind – PayPal was once the world’s largest online payments provider, thanks to its integration with another Internet giant, eBay. But in recent years, its dominance has been shaken by entrants like Robinhood and Square’s Cash app, which, like PayPal, operates as a person-to-person payment service but has started offering exchanges of cryptocurrency earlier.

PayPal wants to regain the throne by catching up with trendy upstarts to become a kind of one-stop-shop for all types of digital transactions.

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