Business

PayPal CFO says companies are unlikely to invest cash in cryptocurrencies

PayPal is unlikely to buy digital currencies like Bitcoin, but the company sees great opportunities in the area of ​​digital wallets.

PayPal Chief Financial Officer John Rainey said on Thursday’s CNBC “Mad Money” appearance that PayPal giants aren’t interested in buying cryptocurrencies and will invest in additional services on the platforms they offer. He said he likes it.

In response to an inquiry from show organizer Jim Cramer, he said, “I’m probably not going to invest corporate cash in that kind of financial asset.” “But I want to take advantage of this growth opportunity in front of me. Our.”

The company admits that it believes the transition to digital currencies is inevitable. In December, PayPal CEO Dan Schulman called digital wallets “a natural complement to digital currencies” and said the company offers 360 million digital wallets.

PayPal is exposed to the crypto market. In October, the company announced that it would allow users to buy, hold and sell cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Users can also shop with digital coins on PayPal’s retail network.

Venmo, a mobile wallet owned by PayPal, will begin offering the same service earlier this year. The functionality will be extended to the international market.

PayPal will invest in companies that provide “complementary assets to the platform” that can drive growth, Rainey said. The company also announced Thursday that it will introduce the purchase, sale and retention of crypto services in the UK in the near future.

“Types of services we offer, such as buy now, pay later, etc. [and] Cryptocurrencies as an example (even offline QR codes) are the type of thing we want to keep investing in, whether organic or inorganic, when the ecosystem sees an opportunity. ” Explained.

Buy Now and Pay Later is a point-of-sale loan program that acts like a reserve plan, allowing shoppers to pay for their products through installment plans with no interest or fees.

Cryptocurrency comments come from the increased activity in the cryptocurrency market this year. Tesla made a splash earlier this week when it announced that it would buy $ 1.5 billion worth of Bitcoin and start accepting the currency as a payment method for its customers. Since then, interest in dogecoin, the digital coin that Tesla CEO Elon Musk congratulated on his Twitter page, has skyrocketed.

Tesla’s move to invest in Bitcoin has wondered the investment community if other companies follow in the footsteps of Karmarkar. Earlier Thursday, Uber CEO Dara Khosrowshahi said he had discussed the topic but eventually refused to invest in digital currencies.

PayPal increased its free cash by 48% to $ 5 billion in 2020, said Schulman, who appeared alongside Rainey in an interview with Mad Money. He predicts that the company will generate $ 10 billion in free cash flow annually by 2025.

PayPal will be an integral part of the financial technology industry, he said.

“We want to use that cash. We want to use our balance sheet as a strategic weapon,” Schulman said. “It may return cash to shareholders, or it may be due to an acquisition, but all of those dollars are important to us and we really take capital allocation very seriously.”

Last month, PayPal made its first acquisition since it announced in late 2019 that it would acquire coupon aggregator Honey Science for $ 4 billion. PayPal has 100% control over its China-based GoPay payment platform in a transaction that closed on January 11.

PayPal CFO says companies are unlikely to invest cash in cryptocurrencies

Source link PayPal CFO says companies are unlikely to invest cash in cryptocurrencies

Back to top button