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Online payments: What will PayPal buy next?

By Dan Wilson September 28, 2017 - 8:35 am

According to experts in the field, PayPal is (and should be) in the market for expansion and growth and the most obvious course of action is via acquisition. So what might be on the shopping list?

Lisa Ellis at Wall Street analysts Bernstein keeps a close eye on PayPal and she offered her viewing recent note: “We believe a strategic acquisition will most likely be positive for PayPal’s stock, particularly if it enables geographic expansion or user engagement – two critical long-term growth drivers for PayPal.” So what are the possible targets for a potential acquisition?

In the USA, Square or Stripe are obvious takeover targets. In Europe, Adyen and Klarna are obvious suitors. Indeed, in reference to a previous acquisition, Ellis calls Adyen the “Braintree of continental Europe.”

Making a big acquisition may impress the analysts and investors of Wall Street but it’s not immediately apparent why that should be a priority. And it is interesting that the suggested targets are all already in the payments market and they so also offer similar services to PayPal. Where perhaps it is lacking, as has been noted by other reporters, is the firm’s lack of attraction to the all-important emerging millennial market. They pay, especially in the US, with other services.

One of the reasons that the Braintree purchase has been such a success is technology. Braintree is ever so clever and it has allowed PayPal to expand and develop the business. And when you consider the payments business, its not so much a case of snapping up a similar competitor but rather more about acquiring superior expertise or better intelligence.

It will be interesting to see how PayPal grows in the next few months. It is undeniably a huge internet player with huge scope. What would you like to see next? What do you want it to do for you?

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