Wwith other big fintechs like Square (NYSE: SQ) and SoFi (NASDAQ: SOFI) the deployment of stock trading platforms in recent years, it is not too surprising that Pay Pal (NASDAQ: PYPL) plans to do the same. In this fool live Video clip, registered on August 30, Fool.com contributor Matt Frankel, CFP, and Focus on industry Host Jason Moser discusses what this might (or might not) mean for investors in the fintech giant.
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Jason Moser: I see a headline here, PayPal is exploring a stock trading platform for its US clients, reading this on CNBC on their app right now. Can’t say I’m terribly surprised by this, maybe I’m a little surprised it’s not something they pursued earlier. Over the past few quarters, we’ve seen Square talk about the doubling of Cash App user growth in the market. Cash App users who own or have purchased shares. It looks like PayPal is also planning to embark on something like this, leading the service here, originally called Invest at PayPal. Obviously, something that works for us. What do you think of these plans? Is this something that makes sense for PayPal, do you think?
Matt Frankel: Well my first thought was exactly the same as yours, why did it take them so long to do it?
Moser: They focused on other things, I think.
Frankel: Well, certainly. But my other thought adjacent to that is, are they late for the party? Has everyone figured it out already? Stock trading exploded in mid-2020.
Moser: It made.
Frankel: How many traders came to the market? Robin Hood (NASDAQ: HOOD) exploded, SoFi launched its platform, Square launched its platform. All brokerage commissions went to zero a few years ago, which got a lot of people out of the vault. Who is interested in stock trading doesn’t already have a brokerage they are talking to? I’m worried if there might be a bit of a delay. I would have preferred to see them do this through acquisition is my initial thought, like the way Square is now trying to build their platform buy now, pay later because they’re late to the party. PayPal has already built theirs, To affirm (NASDAQ: AFRM) and Afterpay are already there, so they went looking for someone who already existed to make up for time for being late to the party. PayPal is late for this holiday, I think. I think they have an uphill battle ahead of them, their advantage is their huge following, especially on Venmo. If they fit in with Venmo, I could see this was a big deal. But I don’t know if this is going to be a major needle driver for the company. I think it could just be a value-added service.
Jason Moser owns shares of PayPal Holdings and Square. Matthew Frankel, CFP owns shares of SoFi Technologies, Inc. and Square. The Motley Fool owns shares and recommends Affirm Holdings, Inc., PayPal Holdings, SoFi Technologies, Inc. and Square. The Motley Fool recommends the following options: $ 75 long calls in January 2022 on PayPal Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.