Whatâs Going On Here?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?PayPalâs former owner, eBay, spun the payment company off six years ago, but theyâve kept working closely together ever since. Now, though, eBay is transitioning toward its very own payments system. That ghosting was evident last quarter, when eBayâs users spent 45% less via PayPal than they did the same time the year before. Throw in the fact that payments on PayPalâs cash transfer app Venmo grew by a weaker-than-expected 36%, and the firmâs total revenue only climbed by 13%.
PayPalâs revenue outlook for the rest of the year was disappointing too, mostly because the companyâs worried that supply shortages and the return of in-store shopping could dent ecommerce activity. Needless to say, investors arenât 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 itâs 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 (tweet this). And since Venmo has been supporting crypto payments since April, the move might bring Amazon one step closer to learning some new tricks tooâŠ
Zooming out: Cryptoâs the place to be.
Amazon would be wise to think about integrating crypto payments: the marketâs 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 Reserveâs 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. | 