Markets news | PayPal will be able to trade stocks and create savings accounts

PayPal Holdings Inc. took aim at stock trading and high yielding savings accounts.

Payment giantexpects the number of active users of its vast platform to grow to 750 million by the end of 2025year - approximately double compared to the currentlevel as it expands into new areas of financial services, Chief Executive Officer Dan Shulman said Thursday at the company's investor day. Thanks to his latest plansPayPal aims to be the next financial super app in the world, akin to Chinese firms Alipay and WeChat Pay.

“There are few companies in the world that can even strive for this vision,” Shulman said. “This requires cross-industry capabilities, from financial services to payments, shopping and technology.”

PayPal is coming off a record year with spendingon its platform soared 31% as consumers turned to online shopping in droves after the pandemic shuttered stores around the world. During the year, the company added 72.7 million users and revenue grew to $21.5 billion.

This happened even when the main businessPayPal has faced intense competition from companies such as Apple Inc. and payment giants Visa Inc. to speed up the online checkout process. and Mastercard Inc. However, this is an area in which PayPal dominates: the firm's button has been added to nearly three-quarters of the top US retail sites, according to a poll conducted by Google last year. Pymnts.com.

One stop

PayPal has now set its sights on turningyourself to a one-stop shop for consumers and sellers to manage their finances. The firm said the new products could include stock trading and high-yield savings accounts, as well as bill payment and check cashing capabilities.

The firm's new digital wallet will be divided into a financial services tab, a payments tab and a shopping tab, Shulman said in an interview after the Investor Day event.PayPal hopes to debut new features within the next 2 years.

“We do a lot organically because ourthe platform and our product capabilities are as reliable as ever, ”Schulman said in an interview. “But we'll also be looking for partners with people,” he said, adding that “we're also looking at acquisition potential where it might make sense.”

The company is leaning towards the success it has already seen,adding the ability for users to buy, sell and store cryptocurrencies in digital wallets in recent months... Half of all customers who usedWith this feature, they are now logged into the app every day - which means PayPal has become a destination for these customers, not a place where they go as needed.

Income stimulation

“This is exactly the type of engagement that we want to see when adding these additional financial services,” said CFO John Rainey.

This is because such activities, in turn, generate income. Shulman said that nowthe firm expects the average amount of revenue it receives from each user to grow substantially over the next five years.

PayPal is now on track to more than double revenue to $50 billion in 2025 as payments volume on its platforms triples to $2.8 trillion. Besides,the company expects to generate $40 billion in free cash flow over the next five years.

PayPal shares rose 0.5% to $284.62 on 3:28 pm in New York after rising 6.7% in previous trading. The stock is up 673% since it was spun off from eBay Inc. in 2015, compared with an 89% rise in the S&P 500 index.

PayPal has warned that some of the newinitiatives have caused a sharp rise in technology and development costs. Such expenses have already increased by 27% to $ 2.64 billion last year. However, the firm said it expects earnings to rise 17% on an adjusted basis this year.

“We really hit our stride in 2020,” Shulman said. “And I'm so excited about what we plan to do and what we're going to do this year and in the coming years.”

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