Shares of PayPal (PYPL - Free Report) sunk last Friday after news broke that Amazon (AMZN - Free Report) might enter the peer-to-peer payment business. But PayPal’s downturn didn’t last long as investors dove back into the stock on Monday after the company announced a new international venture, and its larger banking ambitions became more well-known.
PayPal just announced a new partnership with Safaricom that will allow users in Kenya to transfer money between their M-PESA and PayPal accounts. This should enable them to buy goods and services from all over the world more easily than before.
Safaricom launched its mobile payment platform, M-PESA, in 2007 and it now boasts nearly 28 million customers. “We are excited to bring the M-PESA mobile wallet and PayPal joint services to the Kenyan market, which makes it more convenient and secure for users to withdraw and add money to their accounts while participating in the global digital economy,” PayPal’s GM for the Middle East, Africa and Russia, Efi Dahan, said in a statement.
PayPal’s latest partnership is part of a series of international growth efforts that have led to real results. Last quarter, PayPal’s international revenues climbed 21% year over year to reach $1.69 billion. International sales accounted for 45% of PayPal’s total Q4 revenues.
Yet, despite PayPal’s international expansion, the U.S. is still hugely important for the digital payment power. PayPal’s Q4 U.S. sales climbed by 30% to hit $2.05 billion, and now the company’s domestic top line might be set to get an even bigger boost.
PayPal has slowly expanded into the traditional banking industry over the last few months, according to a recent Wall Street Journal report. The San Jose, California-based firm currently reaches out to select customers to see if they would be interested in adding basic banking features to their PayPal digital wallets.
The company, which became known for its secure e-commerce payment platform, now offers select customers debit cards, FDIC insurance for their balances, the opportunity to direct-deposit paychecks, and much more.
However, PayPal still doesn’t have an official U.S. banking license, which means it offers services, like its small business loans, through partnerships with banks.
PayPal’s entrance into the larger banking industry puts the company in direct competition with other fintech firms. Square (SQ - Free Report) also offers clients the chance to take out small business loans and recently began giving users of its Cash App the chance to open bank cards.
Recent Amazon Fears
PayPal’s Venmo and Square’s Cash App have become hugely popular with younger users, as they allow them to pay friends and family for everything from food to rent. The success of these apps forced big banks, like JPMorgan Chase (JPM - Free Report) , to invest heavily in similar mobile payments technology.
Now Amazon looks ready to enter this crowded peer-to-peer marketplace. The e-commerce juggernaut is reportedly in the early stages of developing its own person-to-person payment technology for its widely popular Alexa voice assistant (also read: Amazon Looks to Enter Person-to-Person Payment Business).
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