PayPal, with a whopping 75% rise in its share price since the beginning of the year has not only surpassed American Express, but has inched closer to Morgan Stanley and Goldman Sachs in terms of market value. The California-based mobile payment company witnessed a swift growth from its $47 billion value a little over two years ago to about $83 billion last week, while American Express’ value stood at $82.1 billion. PayPal’s worth is just $6 billion less than Morgan Stanley and about $10 billion less than Goldman Sachs. Sharp growth in mobile payments led PayPal to report a better-than-expected third-quarter profit, Reuters reported.
PayPal has been working hard in recent years to expand its reach to new customers through partnerships and acquisitions, particularly in mobile payments. Those deals are clearly starting to bear fruit, analysts said. “It was just a very strong quarter across the board,” said A.B. Mendez, an analyst and fund manager at Frost Investment Advisors.
Since separating from online marketplace eBay in 2015, PayPal has reshaped itself from a company that mostly processed transactions for its parent to a payments giant that handles money transfers between other companies and customers, as well as friends, roommates, overseas relatives and small businesses.
Much of the gains have come from PayPal’s aggressive effort to pick up market share in the fast-growing mobile payments space. Its mobile payments volume jumped 54 percent during the third quarter compared with the year-ago period, to about $40 billion. Total payments volume rose 31 percent to $114 billion.
PayPal has provided access to more than $3 billion in funding to more than 115,000 small businesses since its launch in 2013 and is planning to acquire Swift Financial, an online lender for small businesses in the US. PayPal said the move is part of its efforts to support the hard work of small business owners and entrepreneurs.
Last year, PayPal partnered with Facebook Messenger, allowing more than 2.5 million US customers to connect their accounts, use PayPal to shop on Messenger and enable Messenger as a means of communication for PayPal users.