PayPal Looks to Enter the Stock Trading App Fray

Payments platform PayPal has been in expansion mode this year, and it is bolstering its profile in the fintech space in the interim. First, the company rolled out cryptocurrency trading in the U.S., followed by an international expansion push into the U.K. Apparently, PayPal isn’t done and now it wants to compete with the likes of trading app Robinhood.

According to a report on CNBC, PayPal is eyeing the launch of an equities trading platform. The company got the idea after customer demand for its cryptocurrency offering went through the roof. PayPal has seen the attention around commission-free trading app Robinhood, and management might think that it could do a better job for investors.

A PayPal brokerage could be more than just a glimmer in the eye of CEO Dan Schulman. The company has already tapped regulated brokerage Ally Invest alum, Richard Hagen, to spearhead its Invest at PayPal division. Hagen would be the logical choice to spearhead the brokerage app if PayPal takes the plunge into stock trading. His LinkedIn profile states that his role is to “explore opportunities in the consumer investment business.”

Competitive Landscape

If PayPal moves forward with the app, it will happen in 2022 and it would be geared toward U.S. users to start. PayPal would be entering the fray with the likes of Robinhood in addition to SoFi and Square’s Cash App.

For its part, Robinhood has come under fire this year after getting on the bad side of retail investors during the height of the meme stock craze. Robinhood is a popular app for individual investors. When these investors were able to turn the table on sophisticated traders in GameStop’s stock, Robinhood caved to the institutions and halted trading in the stock. PayPal must see an opening to take market share from the somewhat tarnished Robinhood brand.

PayPal’s Stock

Shares of PayPal rallied on the news, climbing nearly 4% higher. Year-to-date, PayPal’s value has ballooned by nearly 25% as investors have rewarded the company for its crypto-related moves.

If today’s trading is any indication, PayPal could give Robinhood a run for its money.  While PayPal’s stock rallied, Robinhood’s fell nearly 7%.