PayPal Holdings Inc. (NASDAQ: PYPL) is an American multinational financial technology (fintech) company that offers online payments solutions to consumers and merchants across the globe.
PayPal was founded in 1998 and is headquartered in San Jose, California. After being taken over by eBay in 2002, it was spun off as a listed company in 2015.
If you want to buy into this fintech success story, here's how and where you can buy PayPal shares in Australia.
The complete guide to buying US shares.
About the company
PayPal had the first mover advantage as a fintech offering alternative payment technology and made full use of it. Today it is available in over 200 countries and supports 25 currencies. You can use PayPal to make payments or receive money on eBay and other websites and through your mobile.
At the end of 2020, PayPal had 377 million active accounts including 29 million merchant accounts. In the quarter ended 30 June 2021, it reported total payment volume of USD $311 billion with a revenue of US$ 6.2 billion.
PayPal subsidiaries include Venmo, a person-to-person payment platform, and Xoom, an international money transfer business.
From the outset of the COVID-19 pandemic PayPal and Venom, its mobile App, experienced a tremendous surge in demand from across the globe as more people resorted to online transactions amid lockdowns. The entire online payment industry, including those within traditional banks, saw a surge in use.
At its 2015 IPO PayPal stock was listed at USD $36.71. If you had invested in PayPal stock at that price, you would have got a 652.76% return over the past 6 years with an annualized return of 39.99%.
Step 1: Select a broker
There are many online brokers that offer different options. When choosing a broker, there are some important features you should look out for. These are some of the key features to look for when choosing a broker.
Many US share trading platforms offer this option. It is possible to save money on share trading by not paying commissions.
Fractional share investment
Fractional share investment means that you can buy a portion of a share, rather than the entire thing. This may be worth considering as PayPal’s shares typically range from USD $250 - USD $300.
Simple-to-use trading platform
It doesn't have to be difficult to trade shares. Keep an eye out for a platform that is simple to use.
Research and reporting
You should look for platforms that have a strong research and reporting section. This section can provide you with important information about PayPal such as company overview, price history and recommendations, and even price forecasts.
Step 2: Fund your trading account
Next, deposit funds into your account. If you just opened a trading account, it might take some time before the funds clear so you can trade.
Step 3: Decide how much to invest
If you can invest with fractional shares, you can invest exactly the amount you want to. Therefore, you can start with a small investment and take on less risk.
Step 4: Decide whether to invest in an ETF or buy shares
An ETF is made up of shares in many different companies. PayPal, being a prominent company, is listed in many of them including Vanguard S&P 500 ETF and iShares Core S&P 500 ETF. Therefore, you can either purchase a share in the company or invest in them via an ETF. These funds are less appealing to active traders because they have less control over the money's destination, but are typically considered less of a risk.
Step 5: Place your order
You can customize what you buy and for how much. There are many order types. These are the main order types.
Order to purchase/sell shares instantly. This ensures that the order is executed immediately, but does not guarantee the price.
Execution-only orders for buy limit orders are executed at the price quoted or less. You may wish to buy PayPal stock at a price of USD $267. You can submit a limit order for this amount. It will only be executed if PayPal shares fall to USD $ 267 or less.
This type of order allows you to sell your shares at a certain price or higher. Let's suppose you want to sell PayPal shares at USD $270 per share. Your stop limit order is executed when the shares reach this price.
You decide the price at which it is worth selling your shares. Let's take, for instance, USD $265 as your price at which to sell PayPal shares. Your stop-loss order will be executed if the price falls to that level and your shares will be sold at the next available market price..
Step 6: Place your order
After you've chosen a broker and funded your account according to the amount you want to invest, and determined how you will invest your PayPal shares based on the order type, you can place your order. This is usually done with a click of a button.
Once you have bought a share, you need to keep an eye on your investment and its performance.
Watch PayPal share price trends and company performance
You can invest in shares with a speculative motive, to benefit from stock price fluctuations or to hold your investment long-term to benefit from the growth of long-term value including potential dividends.
PayPal's competitors and developments in the global payment industry
PayPal CEO, Dan Schulman, told Fortune early in the pandemic that, "I do think, as we’re seeing a new era of digital payments, that we’re not going to go backwards to what was. We’re not going to be using cash nearly as much."
And he is proving to be right. The post-COVID new normal will see more people conducting electronic transactions. Combining that with the growth in the gig economy with more people turning to freelancing, there is a lot of scope for the online payment processing industry. PayPal has global name recognition and the first mover advantage.
Traditional banks are also moving to offer online payments and money transfers, a trend that accelerated especially after the advent of COVID-19. In order to do so, they tend to work with up-and-coming fintechs. So the competition in alternative payment paths is only going to accelerate.
The growing popularity of cryptocurrencies is a competing trend for PayPal. You may want to watch how PayPal adapts to the growing use of cryptocurrencies.
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