PayPal is a renowned digital payment solution. It operates on a global scale connecting consumers and merchants. PayPal is showing no signs of slowing down. Indeed, as of Q2 2020, its active accounts were up 21% y/y, with more than 26 million active merchant accounts.
PayPal Holdings, Inc. engages in the development of technology platform for digital payments. Its solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products. The firm manages a two-sided proprietary global technology platform that links customers, which consist of both merchants and consumers, to facilitate the processing of payment transactions. It allows its customers to use their account for both purchase and paying for goods, as well as to transfer and withdraw funds.
The firm also enables consumers to exchange funds with merchants using funding sources, which include bank account, PayPal account balance, PayPal Credit account, credit and debit card or other stored value products. It offers consumers person-to-person payment solutions through its PayPal Website and mobile application, Venmo and Xoom. The company was founded in December 1998 and is headquartered in San Jose, CA.
Square, Inc. (Square) is a commerce ecosystem. The Company enables its sellers start, run and grow their businesses. It combines software with hardware to enable sellers to turn mobile devices and computing devices into payments and point-of-sale solutions.
Once a seller downloads the Square Point of Sale mobile application, they can take their first payment. With its offering, a seller can accept payments in person via magnetic stripe (a swipe), Europay, MasterCard, and Visa (EMV) (a dip), or Near Field Communication (NFC) (a tap); or online via Square Invoices, Square Virtual Terminal, or the seller’s Website.
Once on its system, sellers gain access to technology and features, such as reporting and analytics, next-day settlements, digital receipts, payment dispute management and chargeback protection, and Payment Card Industry (PCI) compliance. On the consumer (buyer) side, Square Cash offers individuals access to a way to send and receive money.
Square reports fourth-quarter results on Feb. 26 after the markets close
Square (NYSE:SQ) reported Q3 2019 results in early November and crushed it. Next week, the company reports its fourth-quarter results. The fintech disruptor has a good track record for beating analyst estimates. That’s great news for owners of SQ stock.
Credit Suisse starts Square, PayPal coverage as bull
Square (NYSE:SQ) rises 1.7% after Credit Suisse initiates coverage with an Outperform rating. Sets price target of $84; implies 21% upside potential vs. $69.29 close on Thursday.
Credit Suisse also picks up coverage of PayPal (PYPL -0.6%) with an Outperform rating and $135 price target; implies 15% upside vs. Thursday close of $117.89. Morgan Stanley analyst James Faucette lifts his price target on PayPal to $137 from $129, implying a 16% upside potential
Quant rating for PayPal is Neutral; Sell-Side average rating is Bullish (23 Very Bullish, 11 Bullish, 6 Neutral, 1 Bearish). For Square, Quant rating is also Neutral; Sell-Side average rating is Bullish (13 Very Bullish, 5 Bullish, 16 Neutral, 3 Bearish, 3 Very Bearish).
Visa to buy Plaid for $5.3B
The acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business, Visa said.
Visa Inc. (Visa) is a payments technology company that connects consumers, merchants, financial institutions, businesses, strategic partners and government entities to electronic payments. The Company operates through payment services segment. The Company enables global commerce through the transfer of value and information among the participants.
1. Visa — 323M Cardholders
Visa is a monolith in the credit card world, widely accepted by over 8 million merchants. From traditional benefits to premium rewards, Visa personal credit cards offer a wide range of benefits for cardholders around the world. Mobile cardholders can save themselves time and shop online using Visa Checkout.
2. MasterCard — 191M Cardholders
The second most major credit card network in the United States, MasterCard offers perks like easy bill pay and personal information protection using chip technology. MasterCard processes transactions in over 210 countries and in more than 150 currencies.
Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. It primarily works by unbundling offerings by such firms and creating new markets for them.
Fintech startups received $17.4 billion in funding in 2016 and were on pace to surpass that sum as of late 2017, according to CB Insights, which counted 26 fintech unicorns globally valued at $83.8 billion. The same firm reported that there were 39 VC-backed fintech unicorns worth $147.37 billion by the end of 2018.
“Bulls argue that the growth runway is huge for Square. While payment processing is the firm’s bread and butter right now, that won’t always be the case. SQ has gone from being simply a payment processor for small businesses to becoming a one-stop shop for merchants. Square has been tacking on extra offerings for years now, from inventory management and shipping to payroll and lending. Those extra services differentiate SQ from its peers, and make switching costs for merchants much higher because they already rely on Square’s ecosystem in order to run their businesses efficiently. “
By Laura Hoy, InvestorPlace ContributorMay 29, 2019, 2:49 pm EDT