PayPal is interested in developing a stock trading platform, according to a report by CNBC citing anonymous company sources. With this measure, PayPal would be a direct competitor to Robinhood, a stock trading app that helped create an increase in retail investment, but is growing control of the Securities and Exchange Commission.
CNBC reports that PayPal recently hired Rich Hagen, a powerful brokerage industry, for a new division called Invest at PayPal, a fact confirmed by Hagen’s LinkedIn page. Hagen co-founded TradeKing, an automated investment platform that sold to Ally Invest for $ 275 million.
Hagen’s LinkedIn describes his work as “Leading PayPal’s Efforts to Explore Opportunities in the Consumer Investment Business.” As CNBC points out, at least 10 million Americans have started trading stocks for the first time during the first half of this year.
From CNBC:
When it came to commenting, PayPal directed CNBC to comments from CEO Dan Schulman during the company’s investment day in February, when he talked about the company’s long-term vision and how it can include many more services. including “investment capabilities”.
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This is obviously not a denial, but it does not provide us with a timeline for PayPal’s wishes in the realm of retail investment. And that space could become much more muddy in the coming weeks in the months following Monday’s comment by SEC Chief Gary Gensler, who expressed interest in cracking down on business models that depend on free trade applications. actions like Robinhood.
Gensler said De Barron who is studying the possibility of banning so-called “order flow payment,” a completely legal practice on Wall Street that equates to get back to it for information. The practice is banned in the UK and Canada.
From a new report to the New York News Monday:
Gensler told Barron’s that the practice has “an inherent conflict of interest” so that companies running the operations can benefit from this information.
“They get the data, they get the first glance, they get to match buyers and sellers of that order flow,” he said.
Over the past few months, Mr Gensler has made a number of statements saying he was looking closely at the practice and was open to a wide range of regulatory options. He ordered the agency to examine the matter shortly after it was confirmed; the review is ongoing.
PayPal’s interest in allowing average users to trade stocks seems very real, but obviously the SEC could throw a key into the company’s business model if PayPal wanted to pay for the flow of orders. But this is not the only way to make money with retail investment, but it is the most popular right now.