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.
