PayPal’s spending has only just begun
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PayPal’s spending has only just begun

Online payment provider PayPal recently made its largest acquisition to date, purchasing iZettle, a Swedish fintech startup, for $2.2 billion. iZettle was pleased to find another route to expansion beyond its planned IPO – and it may be just one of many companies that chooses to sell out to PayPal. The reason being that PayPal president and CEO Dan Schulman has recently stated in an interview that more big buys could be on the horizon.

PayPal’s share price has increased by 17% so far this year

graph 1007 paypal

SOURCE: Yahoo Finance

In an interview with German publication Handelsblatt Business Daily, Schulman said: “We have a healthy balance sheet and we are ready to put it to work to buy more companies. I wouldn’t rule out that we take on a bigger deal if there’s a good fit for us.” He added that PayPal would be willing to spend as much as $3 billion a year, provided the companies it was buying enabled it “to acquire specific capabilities.”

PayPal’s spending spree is part of the expansion strategy that has seen it transform from being eBay’s “in-house” payments system to one of the world’s largest and most powerful online payment providers. As the trend towards a cash-lite society continues, PayPal is maneuvering into a position where it can capitalise. With debit card payment volumes projected to increase almost 50% over the next decade, and online payment networks growing fast, that’s a great position to be in.

Disclosure

Dominion holds PayPal in its Global Trends Managed Fund.


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