PayPal is tearing through a flurry of payment company acquisitions, having snapped up four in just a five-week period this year.
Investors are bullish on the sector as it combines Silicon Valley’s technology euphoria with a mega-trend shift to digital transactions. This year has already been a record for payment company deals, with $46 billion in acquisitions (paywall) though June, according to Dealogic. That compares with $33 billion in total for last year
PayPal wants to keep up the pace, spending as much as $3 billion a year on buyouts, CEO Dan Schulman said in an interview with Handelsblatt. The shopping spree has given the San Jose, California-based company a growing number of links in the chain we use to make digital transactions. Recent acquisitions include iZettle, a Swedish mobile payments company, and Hyperwallet, which businesses can use to pay employees around the world (the deal size is only shown if it has been verified by Pitchbook):
| Target | Date | Amount ($ million) |
|---|---|---|
| Simility | June 22, 2018 | 120 |
| Hyperwallet Systems | June 19, 2018 | 400 |
| Jetlore | May 30, 2018 | |
| iZettle | May 17, 2018 | 2,200 |
| Swift Financial | September 20, 2017 | 183 |
| TIO Networks | July 18, 2017 | 239 |
| Xoom | November 12, 2015 | 1,226 |
| Modest | August 19, 2015 | |
| Paydiant | April 2, 2015 | 285 |
| CyActive | March 5, 2015 | 70 |
| StackMob | December 17, 2013 | |
| Braintree | September 26, 2013 | 800 |
| Card.io | July 18, 2012 | |
| Fig Card | April 28, 2011 | |
| Fraud Sciences | January 30, 2008 | 169 |
| VeriSign (Payment Gateway Business) | December 31, 2005 | 370 |
| Octasoft | January 1, 2002 | |
| X.com | March 1, 2000 | |
| Source: Pitchbook |
As people gradually abandon ATMs and bank branches, mobile payment companies are also winning some of the most important real estate in the digital economy. Square App, PayPal, and Venmo are among the most-downloaded finance apps in the US, according to data from App Annie.
And while cash is far from dead, it’s becoming a lot less popular in some geographies. Germans famously prefer to buy things using hard currency, but the Swedish have just about given up on notes and coins. In the UK, electronic debit card payments outnumbered those with physical money last year. Debit card payment volumes are projected to increase by more than any other payment method during the next decade, rising almost 50% to 19.7 billion payments.
These trends have been a powerful tailwind for fintech upstarts. Shares of Dutch payment-processor Adyen jumped more than 90% on their first day of trading, while those of Square have more than doubled in the past year. PayPal’s stock has soared more than 50% during that span.