Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Tough Breakup

Posted November 10, 2021 at 10:45 am

What’s going on?

PayPal reported worse-than-expected results late on Monday, as the payment app realizes that the only way to get over eBay might be to get under Amazon.

What does this mean?

PayPal’s former owner, eBay, spun the payment company off six years ago, but they’ve kept working closely together ever since. Now, though, eBay is transitioning toward its very own payments system. That ghosting was evident last quarter, when eBay’s users spent 45% less via PayPal than they did the same time the year before. Throw in the fact that payments on PayPal’s cash transfer app Venmo grew by a weaker-than-expected 36%, and the firm’s total revenue only climbed by 13%.

PayPal’s revenue outlook for the rest of the year was disappointing too, mostly because the company’s worried that supply shortages and the return of in-store shopping could dent ecommerce activity. Needless to say, investors aren’t confident either: they initially sent its stock down 5%.

Why should I care?

The bigger picture: A more supportive relationship.

PayPal reckons Venmo could be its biggest source of revenue in the future, and it’s laying the groundwork to make that happen: the company just announced that Amazon would be introducing the transfer app as a payment option next year. And since Venmo has been supporting crypto payments since April, the move might bring Amazon one step closer to learning some new tricks too…

Zooming out: Crypto’s the place to be.

Amazon would be wise to think about integrating crypto payments: the market’s now worth over $3 trillion, with bitcoin and ether each reaching all-time highs on Tuesday. That might partly be down to the launch of the first US bitcoin-ETF last month, which has introduced more people to the OG cryptocurrency and inspired hopes that more crypto ETFs are in the pipeline. The US Federal Reserve’s still skeptical, mind you: it warned investors this week that risky assets like crypto are particularly susceptible if the still-peaky economy takes a turn for the worse.

Originally Posted on November 9, 2021 – Tough Breakup

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Complex or Leveraged Exchange-Traded Products

Complex or Leveraged Exchange-Traded Products are complicated instruments that should only be used by sophisticated investors who fully understand the terms, investment strategy, and risks associated with the products.  Learn more about the risks here:

Disclosure: Bitcoin Futures

TRADING IN BITCOIN FUTURES IS ESPECIALLY RISKY AND IS ONLY FOR CLIENTS WITH A HIGH RISK TOLERANCE AND THE FINANCIAL ABILITY TO SUSTAIN LOSSES. More information about the risk of trading Bitcoin products can be found on the IBKR website. If you're new to bitcoin, or futures in general, see Introduction to Bitcoin Futures.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.