You have probably already heard about Paypal or have already used at least once this system of online payment to make secure purchases online. But what you may not know is that the company that has put in place this system is now one of the largest American companies listed on the stock market.
The American company Paypal Holding is in fact one of the leading providers in the sector of online payment services on an international scale. Its innovation allows individuals and businesses to carry out transactions of purchase and sale of goods and services online, as well as the transfer and withdrawal of funds.
It is thanks to the operation of a highly technological and innovative platform that Paypal can offer such services. This platform is in fact equipped with various solutions to simplify payments on merchant sites, through mobile devices or in stores. These solutions can be found under the form of Paypal, Paypal credit, Venmo and Braintree.
Paypal generates more than 53% of its turnover in the United States. It then hits the UK market with 11.6% and then the rest of the world.
Paypal’s main competitors:
Until some years ago, Paypal was considered the unbeatable giant of secure online payments. Although it has kept its leading position thanks to a very clever strategy, the company is now being challenged by some other large companies that are innovating in this field.
This is the case of companies such as Apple and Google which have launched their own online payment systems called ApplePay and Android Pay which enables you to pay for online purchases on Safari and Chrome browsers using the identification through the smartphone which can be connected to the computer or to other media.
Previously, it was Amazon which caused sensation when it launched its Amazon Pay services based on the same process as Paypal. All you need to do is use your Amazon identifiers to pay for your online purchases on any other site that uses this system.
Therefore, you should closely monitor the influence of these competitors before you start trading Paypal shares online.
Paypal’s main partners:
To finish, here are Paypal’s main partnerships.
In 2016, Paypal announced the establishment of partnerships with the two major global groups of credit cards Matercard and Visa in order to offer in-store transactions.
In 2017, Paypal also signed a partnership with the groups Aon and Europ Assistance in order to offer a free travel cancellation insurance program to its users.
Always in 2017, Paypal signed a partnership with Samsung for its Samsung Pay service, and then, some days later, it announced a similar partnership with Apple for the payment of purchases on Itunes, iBooks, Apple music and Apple Store.
Analysis of Paypal’s share price:
Paypal’s share price is currently listed on the Nasdaq Global Select Market in the United States and is part of the Nasdaq 100 Stock index.
The introduction of Paypal to the stock market took place in July 2014 at a price of $37 per share. It then had a small regress in its historical evolution and it was difficult to anticipate future movements on this basis.
However, we then observed a marked uptrend since its introduction with an almost constant gain of points, barely marked by a few downtrends. A historical record was then reached at $44.15 in October 2016, but this price did not remain fixed for long.
In fact, the price of Paypal shares went almost immediately under the mark of $40 before finally rising above $43.
The advantages and strong points of the PayPal share price as a stock market asset:
An effective trading strategy on the PayPal share price should certainly begin with a comprehensive understanding of the strengths and weaknesses of this group in order to comprehend its ability to develop its activities and continue the company’s growth in the coming years. Before making long term decisions you should therefore reflect on these various points. To begin with we shall start by examining the strengths of this group.
Firstly PayPal is renowned worldwide as a highly secure online infrastructure which presents a reassuring image to the general public and enables it to benefit from an increasing high esteem.
PayPal also benefits from the advantage of offering its online payment services on an international level. In fact, this payment system already enables users from numerous countries worldwide to pay for their purchases or sell items easily online. PayPal is actually available in 24 different currencies and in total there are over 190 different markets worldwide that are related to PayPal.
The PayPal Group can also count upon its numerous users to publicise its services without the need to invest heavily in marketing and communications. This payment system actually accounts for no less than 153 million users worldwide.
Finally, PayPal is often used by scammers that use the ‘fishing’ method, the group has managed to effectively react to this threat by publishing numerous warnings on its website as well as implementing an identification system and signalling notifications of this type of scam.
The disadvantages and weak points of the PayPal share price as a stock market asset:
We shall continue by reviewing the disadvantages of the PayPal company or the weak points that could lead to a negative influence on its growth and therefore indirectly on its stock market share price.
Firstly, it is important to remember here that the PayPal Group is highly exposed to risks related to fraud and that, despite the different methods used, its system of online transactions is still held responsible by many consumers and consumer associations. The potential users of this system can therefore feel nervous about an apparent lack of confidentiality or respect for private information. Numerous controversies relating to transactions completed through this system still regularly make the news which engenders bad publicity for the group and could negatively impact the brand image over the long term.
Another weak point of the PayPal Group relates this time to its difficulties in positioning itself in certain areas around the world, notably in emerging markets. In these countries consumers are still fairly reticent with regards to these new online sales methods. These consumers remain fairly conservative and too nervous to fully embrace this modern technology.
Also, in other countries around the world such as China, Japan, Taiwan or India, the PayPal Group faces certain local restrictions which of course negatively impact its sales by disrupting the system implemented by the group for the general operation of the platform.