News has it that payment service PayPal is exploring a stock-trading platform for customers in the US. The fintech giant is being said to be in the process of exploring ways to allow users to trade individual stocks, around a year after it rolled out the ability to trade crypto.
Rich Hagen Joins The Team
As part of the move, Rich Hagen, a veteran in the brokerage industry, has joined the bandwagon at the San Jose-based company, according to two sources privy to the matter. Hagen has apparently taken over as CEO at PayPal Invest, a hitherto unknown new branch of the firm, ending his stint at Ally Invest.
According to Hagen’s LinkedIn page, PayPal is putting in efforts to “explore opportunities” in the consumer investment sector. CEO Dan Schulman had said back in February that his company is seeking to expand its financial services, which apparently also includes “investment capabilities.”
Many Players In The Game
The move at PayPal comes even as the trading industry goes for a renaissance, with over 10 million individual investors entering the trading market in the first half of 2021 itself. The newfound interest is being attributed to government stimulus checks, stay-at-home orders, and viral events like GameStone.
PayPal is not alone in its endeavor to appeal to individual investors, it seems, as rival Square already allows for both crypto and stock exchange/trading, through its Square Cash App. The group’s CFO holds that the app is primary to their revenue and engagement.
Meanwhile, Robinhood, which recently became a publicly traded company, now boasts of over 22.5 million customers, with revenues going for a double in the recent quarter.
Teaming Up With Broker-Dealers
While not much light has yet been shared on PayPal’s stance on the trading effort, it is expected that it will either collaborate with, or hire altogether, a broker-dealer to do its bidding, and some reports claim that the payments giant is already holding talks with potential partners. On the other hand, should the company choose to get full approval as a single-entity brokerage firm, it will first have to obtain membership with FINRA, the industry’s regulatory agency. This process alone could take up eight months.
A source familiar with the developments has reason to believe that the new trading service will not be rolled out until next year at least. Following the news, PayPal’s shares jumped 3%, while Robinhood saw a 3% decline in shares.