PayPal has Square card “squarely” in its sights
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PayPal has Square card “squarely” in its sights

Online payment specialist PayPal is taking aim at a competitor: Square. The latter has a successful cash app ecosystem, and has recently added a debit card to the properties that play into it. PayPal has its own successful peer-to-peer payment app, Venmo. In a move that is clearly targeted at Square, PayPal is now launching a Venmo debit card – and if it’s as successful as the app its based on, it will have no shortage of takers.

PayPal’s share price has appreciated by 12% so far this year

graph 2806 paypal

SOURCE: Yahoo Finance

Venmo has become a massively popular way to make payments in three situations: peer-to-peer, online, and in the few retail outlets that it’s accepted. But the addition of a debit card will hugely expand that functionality. Now, Venmo will be useable anywhere cashless transaction giant Mastercard is accepted. It will also let users draw out money from ATMs.

Venmo is a fast-growing service, and this card (which will originally be a limited release) will be available to a highly active user base: in the company’s most recent quarter, person-to-person payments increased by 50%, year on year. Total payment volume over the same period was up by 80%, year on year to $12 billion.

Square is keeping tight-lipped about how much its card contributes to the business – but in its most recent earnings call, the company said is was already "becoming a more meaningful contributor to subscription and services-based revenue as consumers benefit from the utility of paying both online and offline." PayPal will be looking to match that – and then, beat it.

Disclosure

Dominion holds PayPal in its Global Trends Managed Fund.


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