A year ago, PayPal traded for $38 and has rallied significantly to $65 on the backs of several product enhancements and partnership agreements. Some of which include the announced monetization of Venmo through in-store purchasing, physical Venmo debit cards, tie-ups with Visa, MasterCard, Citi, Chase, Apple, Facebook, Google and Samsung, to name a few. In short, the company has gone from a simple buy button on a website to dominating in both the online and physical payment space. The days of seeking out partnerships are a thing of the past. Now, PayPal’s in a position to ask, “Should we partner with them?”
Once the Group President of Enterprise Growth at American Express, PayPal CEO Dan Schulman now has his company sitting squarely behind both Visa ($V) and MasterCard ($MA) in market cap among the big payment players. It was once rumored that American Express would make a bid for PayPal after it went public the second time, but looking forward, it appears that the tables have turned. We could someday be looking at a future where American Express is a brand within PayPal. After all, for as many partnerships as Amex has lost, PayPal has gained. American Express still does seem to hold significant value as a rewards provider, though its fees are also among the highest.
Recent analysts seem to think that PayPal still has room to run and hasn’t fully hit its stride yet. While the company sits on hoards of cash, it wouldn’t be surprising to either see some consolidation in the fintech space via acquisitions. If anyone is in a position to do it, it’s likely PayPal.
The thought still runs wild as to whether PayPal will remain independent or not. There are plenty of sharks that are potentially willing to take a bite, including Amazon, Facebook and Google. They all make sense in their own way, but at this point, PayPal has a chance to do something special and independently just as the would-be sharks have done to get to where they are. Additionally, with the current entanglement of partnerships that PayPal now has, any take out by a bigger company might cause complications.
For now (as of this writing), PayPal’s in a great position as the number three payment juggernaut behind both Visa and MasterCard. It’ll be exciting to see what happens next.