PayPal is exploring a stock-trading platform for U.S. customers

 

 

Pay Pal’s interest in starting stock trading platform among the recent frenzy of Robinhood’s IPO. Robinhood debuted its IPO this summer showing massive  gaining over  22.5 million customers doubling  revenue in the most recent quarter from a year ago. Competitors Square, PayPal, Robinhood,  and SoFi offer many of the same products for their customers. Square , a Pay Pal competitor offers stock and cryptocurrency trading through the Square Cash App

Last year Pay Pal  started to trade cryptocurrencies, and  will now open services into trading stocks. More than 10 million new individual investors entered the trading market this year, using services such as Robinhood that make it easy for them to use the app on their phone.  However, regulatory scrutiny for various  brokerage firms is still on the radar.

San Jose, California-based company  Pay Pal hired brokerage industry veteran Rich Hagen was formerly with  Ally Invest. Hagen is now  CEO Invest at PayPal, as listed  his LinkedIn page. Hagen was the co-founder of online brokerage TradeKing, and later bought by Ally Invest.

 

PayPal would be looking to partner with or purchase an existing broker-dealer. If they cannot get close a deal with a brokerage firm, they would have to complete a membership proceeded with FINRA which can take over six months for approval.

CNBC was the first to report this story and  PayPal’s stock jumped more than 3% following and  Robinhood shares falling  more than 3%.

The Securities and Exchange Commission watch dog is actively looking into what they call “gamification” and how these new app trading platforms use technology to interact with their customers. The agency mentioned behavioral practices used by online brokerages and investment advisors that may encourage to take on more risks with trading stocks.

 


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