PayPal has branched out to offer different financial services over the years, most recently making an entry into the world of cryptocurrency transactions. It’s latest conquest involves the deal it has inked with Amazon to allow US customers to check out using Venmo, the mobile payments system PayPal purchased in 2012.
Like most international businesses the company has seen its popularity rise and fall over the years, which is why despite some massive dips in PayPal’s stock value last year, shareholders and financial experts remaining unalarmed.
PayPal in 2021
If you look back at the performance history of PayPal, it has been pretty consistent since 2010, growing steadily year on year. 2021 was a busy year for PayPal, with a number of partnership announcements and opportunities for the business to expand.
This started in late 2020 when it launched its own cryptocurrency trading service; allowing PayPal customers in the US to buy, sell and hold Bitcoin, Ethereum, Bitcoin Cash and Litecoin. PayPal’s expansion into crypto isn’t their first foray into other industries – online casinos have been accepting PayPal for a number of years and this is something that also continued to grow in popularity in 2021.
In December 2021, PayPal completed its $2.7 billion acquisition of Paidy, a Japanese payment platform that allows customers to buy products on finance and pay for them at a later date. There were also rumors of PayPal entertaining the idea of buying Pinterest. However, it was announced in October 2021, that PayPal was no longer pursuing this as an option.
Although most of 2021 was a busy and positive year for the payments solution, the company’s stocks took a tumble when Bernstein announced that they would be lowering the price target from $260 to $220 in November, citing increasing competition from the likes of Square, Apple Pay and Shopify’s new payments platform.
PayPal ended 2021 on a dreary note after missing Wall Street’s revenue expectations for two quarters in a row. In the months leading up to this fall, there was a massive boost in online shopping as people had their movements restricted and were forced to take advantage of e-commerce options.
As the world limped back to a semblance of normality, some relished the opportunity to visit brick-and-mortar establishments and were therefore spending less online – so of course, PayPal would have felt this and their revenue reports betrayed the same.
PayPal in 2022
Although no one can accurately predict what PayPal has planned for 2022, the Amazon-Venmo deal is a great start for the company. We can safely assume expanding further into the cryptocurrency space in on the agenda too.
If you look back at the history of PayPal, it has always stayed at the forefront of financial trends and this tip into cryptocurrency is no exception. In fact, PayPal stock has already started to rally in value, which shows that most investors continue to have faith in it.
As PayPal is a household name with a strong international reputation and over 400 million active users, it would take something big to rock the value of the stock too much. Even the recently passed US legislation requiring digital wallets like PayPal to report transactions of over $600 to the IRS did not really shake things up.
While Wall Street made it clear that PayPal’s interest in Pinterest may have been a bad idea, the company’s overt keenness on Japan, one of the world’s biggest ecommerce markets that happens to mainly deal in cash, was welcomed with enthusiasm. There is also speculation that PayPal might venture into the real estate sector and even explore the possibility of introducing a stock-trading platform.
The Long-term Future of PayPal
Most reputable banks now have their own mobile apps that give their customers instant access to both their funds and the opportunity to send money to others just as quickly. As such, there could be some unfounded concern that the need for PayPal may become less prominent as people switch to alternative methods of payment. However, a ubiquitous digital wallet offers more functionality than a simple banking app.
PayPal’s forays into cryptocurrency, the exploding online casino sector, ecommerce payments via Venmo, ‘buy now, pay later’ solutions and so on show that the company is willing to adapt to the ever-changing industry. It has survived the market for over 20 years, after all.