den 27 juli 2016

Important legal information

In the last days PayPal and Visa announced a cooperation, which could have a huge impact on the payment industry. It will allow PayPal’s digital wallet to be used at any location where Visa contactless transactions are accepted. PayPal users will also be able to move money instantly in and out of the services. This could increase their market share in in-store transaction.

Furthermore, PayPal released it Q2 report: Revenues increased by 15.2 percent to USD 2.65B in one year and the customer number rose by 12 percent. Processed transaction raised up 25 percent to 1.4 billion and even the payment transactions per active account increased by 13 percent year-over-year, meaning that PayPal’s customer base is growing as well as their involvement in people’s everyday life.

The deal with Visa will cause higher costs, but it will also give a huge growth opportunity for the company. PayPal’s CEO Dan Schulman said in an interview: “We want customers to pay any way they want, and the deal with Visa allows us to move more aggressively into the store”.

There are already a few stores, like Abercrombie & Fitch, Foot locker or office depot, which accept PayPal in-store payments.

In addition, the acquisitions of Venmo and XOOM U.S. still help PayPal to grow and complete its service portfolio. Venmo users could send money to their friends and relatives and also share bills. In the second quarter of 2016 the company achieved a 141 percent increase of P2P payments to around USD 4 billion. Therefore PayPal also targets niche markets, which could have a positive diversification affect. Nethertheless the future development remains to be seen.

Bloomberg consensus set the 12-month target price to USD 75.50. As of 25 July 2016, the price per share was USD 38.10. Currently, 29 analysts set Paypal on BUY, 15 on HOLD and 3 on SELL recommendation.


2022-12-01 03:17:48