[ad_1]
PayPal isn’t likely to buy digital currencies like bitcoin, although the company sees immense opportunities in the digital wallet space.
In an appearance Thursday on CNBC’s “Mad Money,” PayPal CFO John Rainey said the payments giant had no interest in buying cryptocurrency, preferring instead to invest in services that add to the platforms it offers.
“We’re probably not going to invest corporate cash in types of financial assets like that,” he said in response to a request from show host Jim Cramer, “but we want to capitalize on this growth opportunity that lies ahead of us. “
The company acknowledged that it believed the transition to digital forms of currency was inevitable. In December, PayPal CEO Dan Schulman called digital wallets a “natural complement to digital currencies” and said the company served 360 million digital wallets.
PayPal has exposure to the crypto market. In October, the company announced that it would allow users to buy, hold, and sell cryptocurrencies, including bitcoin, ethereum, bitcoin cash, and litecoin. Users can also purchase with digital coins in PayPal’s retail network.
Venmo, the mobile wallet owned by PayPal, is expected to start offering the same services in the first half of this year. The functionality will also be extended to international markets.
PayPal plans to invest its money in companies that provide “complementary assets to our platform” that can drive growth, Rainey said. The company also announced Thursday that it will showcase its crypto buying, selling and custody services in the UK in the near future.
“The types of services we offer, like buy now, pay later [and] crypto for example – even the offline QR code – these are the types of things we want to keep investing in, whether organically or even inorganically when we see opportunities in the ecosystem, ”he said. Explain.
Buy Now, Pay Later is a point-of-sale loan program that works much like layaway plans, allowing buyers to pay for products through an interest-free, fee-free installment plan.
The crypto comments come as activity in the crypto markets has picked up this year. Tesla caused a stir earlier this week when the company revealed that it had purchased $ 1.5 billion worth of bitcoin and would also start accepting currency as a method of payment from customers. This follows a resurgence of interest in dogecoin, the digital coin which was blessed by Tesla CEO Elon Musk on his Twitter page.
Tesla’s decision to invest in bitcoin sparked wonders in the investment community if other companies followed in the carmarker’s footsteps. Earlier Thursday, Uber CEO Dara Khosrowshahi said the topic had been discussed but the company ultimately refused to invest in digital currency.
Schulman, who appeared alongside Rainey in the “Mad Money” interview, said PayPal reduced free cash by 48% in 2020 to $ 5 billion. He predicts the company will generate $ 10 billion in annual free cash flow by 2025.
PayPal will be a consolidator in the FinTech industry, he said.
“We want to use this money. We want to use our balance sheet as a strategic weapon,” Schulman said. “It can be a return of cash to shareholders and it can be done through acquisition, but each of those dollars is important to us and we really take our capital allocation very seriously.”
Last month, PayPal made its first acquisition since announcing in late 2019 that it intended to buy the Honey Science coupon aggregator for $ 4 billion. PayPal has taken 100% control of the China-based payments platform GoPay in a deal struck on Jan.11.
[ad_2]
Source link