PayPal is unlikely to buy digital currencies like bitcoin, although the company sees huge opportunities in the digital wallet space.
In an appearance on CNBC’s “Crazy Money” on Thursday, PayPal chief financial officer John Rainey said the payment giant has no interest in buying cryptocurrencies, preferring instead to invest in services that are additional to the platforms it offers. .
“We probably won’t invest in corporate cash in some kind of financial asset like this,” he said in response to a survey by show host Jim Cramer, “but we want to capitalize on this growth opportunity that is ahead of us.”
The company acknowledged that it considers the transition to digital forms of currency to be inevitable. In December, PayPal CEO Dan Schulman called digital wallets a “natural complement to digital currencies” and said the company served 360 million digital wallets.
PayPal has exposure to the crypto market. In October, the company announced it would allow users to buy, hold and sell cryptocurrencies, including bitcoin, ethereum, bitcoin cash and litecoin. Users can also shop with digital coins from the PayPal retail network.
Venmo, PayPal’s mobile wallet, is expected to offer the same services in the first half of this year. The functions will be extended to international markets.
PayPal intends to invest its money in companies that provide “complementary assets to our platform” that can stimulate growth, Rainey said. The company also announced on Thursday that it will introduce its crypto buying, selling and holding services in the UK in the near future.
“The types of services we offer, such as buy now, are paid for later [and] crypto as an example – even offline QR code – these are the types of things we want to continue to invest in, whether it’s 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 just like layaway plans, allowing buyers to pay for products through an installment plan, with no interest or fees.
Cryptographic comments have emerged as activity in the cryptographic markets has increased this year. Tesla made a splash earlier this week when the company revealed it had bought $ 1.5 billion worth of bitcoin and will 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 has worked wonders in the investment community if other companies follow in the footsteps of the marker. Earlier Thursday, Uber CEO Dara Khosrowshahi said the topic was discussed, but that the company eventually refused to invest in digital currency.
Schulman, who appeared with Rainey in the “Crazy Money” interview, said PayPal has grown with free cash by 48% in 2020 to $ 5 billion. He estimates the company will generate $ 10 billion in annual free cash flow by 2025.
PayPal will be a booster in the financial technology industry, he said.
“We want to use that money. We want to use our balance sheet as a strategic weapon,” Schulman said. “This may be the return of cash to shareholders and may be through acquisition, but each of these dollars matters to us and we really take our capital allocation quite seriously.”
Last month, PayPal made its first purchase since announcing in late 2019 that it would buy the Honey Science coupon aggregator for $ 4 billion. PayPal has taken 100% control of the China-based payment platform GoPay in an agreement reached on January 11th.