Shares of PayPal Holdings Inc jumped on Monday after a report that it is exploring ways to let its U.S. customers trade individual stocks on its platform.
After rolling out the ability to trade cryptocurrencies last year, the payments giant has been exploring ways to let users trade individual stocks, according to two sources familiar with the plans told CNBC (Video Below).
One of the sources told CNBC that Paypal recently hired brokerage industry veteran Rich Hagen as part of the move.
Hagen is now the CEO of a previously unreported division of PayPal called Invest at PayPal. His current job description outlines PayPal’s efforts to “explore opportunities” in the consumer investment business.
Trading has become a booming business for the companies that offer it. PayPal rival Square offers stock and cryptocurrency trading through the Square Cash App, and its CFO has said the app drives engagement and revenue per user. Robinhood, which became a publicly traded company this summer, has seen explosive growth with more than 22.5 million customers and doubled revenue in the most recent quarter from a year ago.
In order to offer stock trading to customers, it’s possible PayPal will partner with or buy an existing broker-dealer. According to one source, PayPal has held already discussions with potential industry partners.
Still, one source familiar with the idea said it was unlikely that the trading service would roll out this year. The sources spoke on condition of anonymity because PayPal’s plan was not public, and they were not authorized to share information about possible partnerships.
If PayPal did look to get full approval as a brokerage firm alone, it would need to complete a new membership process through the industry’s main regulator, FINRA. That process could take more than eight months.