Payments giant PayPal plans to let users trade individual stocks, sources told CNBC. To offer stock trading, PayPal could partner with or buy an existing broker-dealer as part of its expansion, CNBC said.
Sources said PayPal has already had talks with potential partners. Brokerage industry veteran Rich Hagen, co-founder of online broker TradeKing, has joined PayPal, the report pointed out.
Last year, PayPal launched cryptocurrency trading, but it lags Square, which already offers both stock and crypto trading through the Square Cash App.
Stock and cryptocurrency trading drives engagement and revenue per user for Square, its management has said. Robinhood (HOOD), which popularized zero-fee stock trading and came public this summer, exemplifies that potential. It has seen eye-popping growth, with revenue doubling from a year ago in its latest quarter.
But PayPal could represent formidable competition. The payments firm has more than 400 million users across the world. Robinhood has 22.5 million users. And PayPal isn’t saddled with the series of black eyes that have hurt Robinhood’s image in the past year, including outages during the meme-stocks frenzy.
PayPal Stock, Robinhood Stock
Shares of PayPal rose 3.5% to 287.96 in big volume on the stock market today, topping the 50-day line. PayPal stock is forming a flat base with a 310.26 buy point, according to MarketSmith chart analysis.
Robinhood stock is well off highs with no entry for now. On Monday, Robinhood said it would release more shares for overallotments from its IPO.
Stock trading has seen a retail boom, due in part to the pandemic. Millions of people, stuck at home in front of computers and screens, entered the stock market for the first time.
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