PayPal Swears Off Buying Another Bank [VIDEO]

  • JJ Hornblass
  • October 27, 2016
  • 0

PayPal will not buy another bank, and specifically not one in the United States.

So declared Dan Schulman, CEO of the payments company, this week. This despite the fact that PayPal Inc. has about $6 billion of cash on its balance sheet.

“We are a bank in Europe; we are large bank over there,” Schulman said at WSJ D conference. “We hold $13, $14 billion of customer balances on our balance sheet over there. But we don’t really aspire to be a bank. We think of a world of mobile and software and thinking, if you were designing a financial system in that world, what would it look like, not sort of extrapolating what was and extending it into digital — really re-imagining the management and movement of money in a world of mobile.”

This is a bold roadmap for strategic planning at PayPal, which has been aggressively hooking into more traditional payments through partnerships with the payment networks, seemingly at odds with a “re-imagined” payments business model. Still, Schulman said PayPal reviews “100+” potential acquisitions per quarter, so perhaps that cash won’t remain idle for long.

PayPal [ticker: PYPL] has a market capitalization of nearly $50 billion.

 

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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