Online brokerages and financial advisors may soon face competition from a new heavyweight as payments behemoth PayPal considers offering its clients a stock-trading platform, according to news reports.
The company has been looking at options to let its customers trade individual stocks, two sources familiar with the plans who asked to remain anonymous tell CNBC.
To do so, the firm may partner with an existing broker-dealer or acquire one, according to the news network. One source tells CNBC that PayPal has already talked with potential industry partners.
Moreover, the company has hired Rich Hagen, the co-founder of online brokerage TradeKing, which has since been acquired by Ally Invest, the news network writes. Hagen left Ally Invest to become chief executive officer of Invest at PayPal, a division that hasn’t been previously reported, according to CNBC, which cites Hagen’s LinkedIn page.
Hagen’s LinkedIn profile has him “[l]eading PayPal’s efforts to explore opportunities in the consumer investment business.”
PayPal, when reached for comment by CNBC, referred to CEO Dan Schulman’s comments on PayPal’s investor day in February when he said that the firm’s long-term strategy may include additional financial services, including “investment capabilities,” CNBC writes.
But one source tells the news network that the platform isn’t likely to roll out this year.
In order to run a brokerage firm on its own, PayPal would need to register as a new member with the Financial Industry Regulatory Authority, which could take over eight months, CNBC writes.
PayPal would be stepping into a crowded space of new companies aiming to become one-stop shops for their users’ financial needs, according to the news network. Square, Robinhood and SoFi are all vying for the title, CNBC writes.
PayPal’s efforts, however, would include tapping its 400 million-strong userbase around the world, according to the news network.
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