American payments giant PayPal is reportedly exploring ways to offer stock trading after launching cryptocurrency trading services last year.
PayPal is looking to buy or partner with a broker-dealer to introduce its own stock trading service to compete with rivals such as crypto-friendly stock trading app Robinhood, CNBC reported on Monday.
Citing anonymous sources, the report notes that PayPal has conducted relevant discussions with potential industry players but is unlikely to launch the new investment service this year. According to CNBC, PayPal’s potential approval as a brokerage firm by the Financial Industry Regulatory Authority could take more than eight months.
As part of the alleged plan, PayPal has already hired brokerage industry veteran Rich Hagen as the new CEO for its previously undisclosed division known as “Invest at PayPal.” According to Hagen’s LinkedIn page, the executive will be responsible for PayPal’s “efforts to explore opportunities in the consumer investment business.”
Hagen is a co-founder and former president of Ally Invest, a regulated brokerage business that acquired online brokerage firm TradeKing in 2016. The new PayPal executive was also the president of TradeKing, which he co-founded back in 2005.
Related: PayPal launches crypto services for UK customers
PayPal representatives reportedly said that the company’s potential plan to introduce a stock trading service comes in line with CEO Dan Schulman’s long-term vision to embrace many more financial services, including “investment capabilities.” The CEO previously disclosed PayPal’s product visions at the company’s investor day in February.
Following the news, PayPal shares surged 3.6%, while Robinhood’s HOOD stock tumbled more than 6%, according to data from TradingView. Earlier in August, Robinhood said that cryptocurrency trading saw a significant surge in popularity on the platform this year, making up 41% of its revenue during Q2 2021.