Business

PayPal CFO says company is unlikely to invest cash in cryptocurrencies

paypal-cfo-says-company-is-unlikely-to-invest-cash-in-cryptocurrencies

PayPal is unlikely to buy digital currencies like Bitcoin, although the company sees immense opportunities in the digital wallet space.

Speaking on CNBC’s Mad Money Thursday, John Rainey, PayPal’s chief financial officer, said the payment giant was not interested in buying cryptocurrency, but rather investing in services that complement the platforms it offers.

“We are unlikely to be investing corporate money in such financial assets,” he replied to a query from the show host Jim Cramer, “but we want to seize this growth opportunity ahead.” from us. “

The company has recognized that the transition to digital currency forms is inevitable. In December, PayPal CEO Dan Schulman described digital wallets as a “natural complement to digital currencies” and said the company served 360 million digital wallets.

PayPal is exposed to the crypto market. In October, the company announced that users could buy, hold, and sell cryptocurrencies like Bitcoin, Ethereum, Bitcoin cash, and Litecoin. Users can also shop with the digital coins in the PayPal distribution network.

Venmo, PayPal’s mobile wallet, is expected to offer the same services in 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 “ancillary assets to our platform” that can drive growth, Rainey said. The company also announced on Thursday that it would launch its buy, sell and hold crypto services in the UK in the near future.

“The types of services we offer, like ‘buy now’, pay off later [and] Crypto as an example – even offline QR code – these are the things we want to keep investing in, be it organic or even inorganic, when we see opportunities in the ecosystem, “he explained.

Buy Now, Pay Later is a point-of-sale loan program that works similar to out-of-office plans and allows customers to pay for products through an installment plan with no interest or fees.

The crypto comments are coming as activity in the crypto markets has increased this year. Tesla caused a sensation earlier this week when the company announced it had purchased $ 1.5 billion worth of Bitcoin and would also accept the currency as a means of payment from customers. This followed a surge in interest in Dogecoin, the digital coin that Tesla CEO Elon Musk had blessed on his Twitter page.

Tesla’s move to invest in Bitcoin sparked wonders in the investment community if other companies followed in the automaker’s footsteps. Earlier Thursday, Uber CEO Dara Khosrowshahi said the issue was discussed, but the company ultimately refused to invest in the digital currency.

Schulman, who appeared alongside Rainey in the “Mad Money” interview, said PayPal cut free cash levels 48% in 2020 to $ 5 billion. He predicts the company will generate $ 10 billion in annual free cash flow by 2025.

PayPal will be a consolidator in the financial technology industry, he said.

“We want to use this money. We want to use our balance sheet as a strategic weapon,” said Schulman. “It can result in cash being returned to shareholders through acquisitions, but we care about each of those dollars and we take our capital allocation very seriously.”

Last month, PayPal made its first acquisition since it announced in late 2019 that it would buy the coupon aggregator Honey Science for $ 4 billion. PayPal took 100% control of the China-based GoPay payment platform. The contract was signed on January 11th.

source

0 Comments

Robert Dunfee