PayPal is not likely to buy digital currencies like bitcoin, although the company sees a unique opportunity in the digital wallet space.
In a look at CNBC’s “Mad Money” on Thursday, PayPal Chief Financial Officer John Rainey said the payments giant is not interested in buying cryptocurrency, instead preferring to invest in services that offer add to the platforms it offers.
“We’re not going to invest corporate money, perhaps, in some kind of financial fund like that,” he said in response to research from the show’s host, Jim Cramer, “but we want to take advantage of it. this growth opportunity is ahead. us. “
The company has admitted that they believe the move to digital forms of money is inevitable. In December, PayPal CEO Dan Schulman described digital wallets as a “natural addition to digital currencies” and said the company serves 360 million digital wallets.
PayPal is open to the crypto market. In October, the company announced it would allow users to buy, hold and sell cryptocurrencies, including bitcoin, ethereum, bitcoin currency and litecoin. Customers can also purchase with the digital coins in PayPal’s retail network.
Venmo, the mobile portfolio with PayPal, is expected to start offering the same services in the first half of this year. The features will be extended to international markets.
PayPal plans to invest in companies that provide “mutual funds to our platform” that can drive growth, Rainey said. The company also announced on Thursday that it will soon be introducing crypto buying, selling and holding services to the United Kingdom.
“The types of services we offer, such as buying now, pay later [and] crypto for example – even an offline QR code – these are the kinds of things we want to keep investing in, be that organically or even organically when we see opportunities in the ecosystem, ” he explained.
Buy now, pay later is a point-of-sale loan program that works very similar to layaway plans, allowing customers to pay for products through an interest-free or tax-free installment plan.
The crypto views come as activity in crypto markets has picked up this year. Tesla showered earlier in the week when the company revealed that it had bought $ 1.5 billion worth of bitcoin and would also begin accepting the currency as a means of payment from customers. That followed a surge in interest for dogecoin, the digital coin blessed by Tesla CEO Elon Musk on his Twitter page.
Tesla’s move to invest in bitcoin sparked wonders in the investment community if other companies followed in the footsteps of the token. Earlier Thursday, Uber CEO Dara Khosrowshahi said the issue was discussed but the company refused to invest in digital currency.
Schulman, who appeared with Rainey in the “Mad Money” interview, said that PayPal free cash rose by 48% in 2020 to $ 5 billion. The company expects to generate $ 10 billion of free cash flow annually by 2025.
PayPal will be a staple in the financial technology industry, he said.
“We want to use that money. We want to use our balance sheet as a strategic tool,” Schulman said. “That may be returning money to shareholders and that could be through buying, but all of those dollars are important to us and we are really taking our capital allocation to very important. “
Last month, PayPal made its first purchase since announcing at the end of 2019 that it would purchase Honey Science aggregator coupon for $ 4 billion. PayPal took 100% control of China-based payment platform GoPay in a deal that closed on January 11th.