PayPal wants to build a super app. It has crazy competition.

PayPal wants to be your one-stop financial app but faces competition from Big Tech, ecommerce giants, and banks.


February 18, 2021

While the rocket emojis came out for Bitcoin breaking $50k, there was another recent money milestone that met with little fanfare: the market cap of PayPal passed Mastercard.

Now valued at $340B+, PayPal has seen its market value quadruple since March 2020 lows.

Its surge has been driven by a user base that grew ~25% in 2020, to 377m (along with 30m merchants), powered by the pandemic forcing commerce online and the unveiling of crypto-trading services. 

Now, PayPal wants to create a super app

The company’s CEO, Dan Schulman, laid out his plan during an investor day presentation.

As reported by Protocol, Schulman notes that most consumers only
“want 8 to 10 apps.” With meme-making tools making up half of them, there’s an appetite for one app covering all your financial needs. 

PayPal plans to focus on payments, shopping, and financial services (checking, savings, investment, crypto, rewards) with these benefits: 

  • AI-powered money management: With all your data in one place, PayPal can help you make budgeting and investing decisions
  • ‘Contextual Commerce’: With a purchase track record, PayPal can partner with merchants to give personalized offers and deals

There’s serious competition, though 

In a follow-up piece, Protocol gives a rundown of the fintech super app playing field:

  • Apple has a massive installed hardware base (iPhone, Watch) used to making in-store payments with a tap
  • Google just re-launched its Google Pay app, also with the intention of being a super app (with benefit of pulling receipt data from Gmail) 
  • Square is a smaller $110B super app competitor in its own right 
  • Shopping apps — Affirm, Amazon, Klarna, Shopify — are well-known brands that have tons of data and consumer cards out there
  • Non-tech firms: Old banks (e.g., Goldman Sachs) and challenger banks (e.g., Chima, Varo) with mobile-first products are growing with younger demographics

While PayPal passing poor Mastercard is definitely a milestone, we can’t pull out the rocket emojis for its super app just yet.

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