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PayPal is apparently in talks to acquire a broker-dealer, but the new investing business is unlikely to materialise this year.
After offering bitcoin trading services last year, American payments giant PayPal is allegedly looking into ways to offer stock trading.
PayPal is looking to buy or partner with a broker-dealer to introduce its own stock trading service to compete with rivals such as crypto-friendly stock trading app Robinhood, CNBC reported on Monday.
Citing anonymous sources, the report notes that PayPal has conducted relevant discussions with potential industry players but is unlikely to launch the new investment service this year. According to CNBC, PayPal’s potential approval as a brokerage firm by the Financial Industry Regulatory Authority could take more than eight months.
As part of the alleged plan, PayPal has already hired brokerage industry veteran Rich Hagen as the new CEO for its previously undisclosed division known as “Invest at PayPal.” According to Hagen’s LinkedIn page, the executive will be responsible for PayPal’s “efforts to explore opportunities in the consumer investment business.”
Hagen is a co-founder and former president of Ally Invest, a regulated brokerage business that acquired online brokerage firm TradeKing in 2016. The new PayPal executive was also the president of TradeKing, which he co-founded back in 2005.
According to PayPal executives, the company’s probable intention to launch a stock trading service aligns with CEO Dan Schulman’s long-term ambition of embracing many more financial services, including “investment capabilities.” PayPal’s product visions were previously revealed by the CEO during the company’s investor day in February.
According to TradingView statistics, PayPal shares rose 3.6 percent in response to the news, while Robinhood’s HOOD stock fell more than 6 percent. Earlier this month, Robinhood announced that cryptocurrency trading has seen a huge increase in popularity on the site this year, accounting for 41 percent of its income in Q2 2021.