PayPal is unlikely to buy digital currencies like bitcoin, although the company sees immense opportunities in the digital wallet space.
In an appearance on CNBC’s “Mad Money” on Thursday, PayPal chief financial officer John Rainey said the payment giant has no interest in buying cryptocurrencies, but prefers to invest in additive services to the platforms it offers.
“We probably won’t invest corporate cash in some kind of financial asset like this,” he said in response to an investigation by program presenter Jim Cramer, “but we want to take advantage of this growth opportunity that lies ahead.” of us. “
The company has acknowledged that it believes the transition to digital forms of coins is inevitable. In December, PayPal CEO Dan Schulman defined digital wallets as a “natural complement to digital currencies” and said the company serves 360 million digital wallets.
PayPal has exposure to the crypto market. In October, the company announced that it would allow users to buy, hold and sell cryptocurrencies, including bitcoin, ethereum, bitcoin cash and litecoin. Users can also shop with digital currencies on the PayPal shopping network.
Venmo, PayPal-owned mobile wallet, is expected to begin offering the same services during the first half of this year. The functions will also be extended to international markets.
PayPal plans to invest its money in companies that provide “complementary assets to our platform” that can drive growth, Rainey said. The company also announced on Thursday that it would introduce its cryptographic buying, selling and maintenance services in the UK in the near future.
“The types of services we offer, such as buying, pay later [and] crypto as an example, even offline QR code, are the kinds of things we want to keep investing in, either organically or even inorganically when we see opportunities in the ecosystem, ”he explained.
Buy Now, Pay Later, is a point-of-sale loan program that works similarly to payment plans, allowing buyers to pay for products through an installment plan with no interest or commissions.
Comments on cryptography come as activity in the crypto markets has increased this year. Tesla got off to a good start earlier this week when the company revealed that it bought bitcoin worth $ 1.5 billion and would also begin accepting the currency as a form of payment from customers. This followed an increase in interest in dogecoin, the digital currency that was blessed by Tesla CEO Elon Musk on his Twitter page.
Tesla’s move to invest in bitcoin brought wonders to the investing community if other companies would follow in the footsteps of the bookmark. Earlier on Thursday, Uber CEO Dara Khosrowshahi said the issue was discussed, but that the company eventually refused to invest in digital currency.
Schulman, who appeared alongside Rainey in the “Mad Money” interview, said PayPal increased its free cash by 48% in 2020 to $ 5 billion. The company expects to generate $ 10 billion in free annual cash flows by 2025.
PayPal will be a consolidator 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. “This may be returning cash to shareholders and it may be through acquisition, but each of those dollars matters to us and we really take our capital allocation very seriously.”
Last month, PayPal made its first acquisition since announcing in late 2019 that it would buy Honey Science coupon aggregator for $ 4 billion. PayPal controlled 100% of the China-based payment platform GoPay in a deal that closed on January 11th.