Why is PayPal Spending $400 Million on Hyperwallet?

paypal on phone

A couple of months ago, eBay and PayPal announced plans to end their current agreement in the coming years. While some people thought this might simply be a ploy to negotiate rates, it seems like both companies are set on expanding in different directions. As of now, both PayPal and PayPal Credit will be available as payment methods on eBay through July of 2023. But what’s different from the current arrangement is eBay will take more control of payments on their platform. This will be done by utilizing Ayden, which is a popular payment platform currently used by companies like Etsy and Uber.

On PayPal’s side, they aren’t letting this change slow them down. In fact, they’ve already made some notable moves to help fuel growth. One of the most significant of those moves is their acquisition of Hyperwallet. Because they paid $400 million to acquire this company, we want to cover all the details of the deal, as well as what it may mean for online payments as a whole.

What is Hyperwallet?

Although PayPal paid a lot to acquire this company, there’s a good chance you may not have previously heard of it. The primary focus of Hyperwallet is to function as a global payout platform for organizations’ mass payment needs. By utilizing this platform, an organization can distribute funds across more than 170 countries. Hyperwallet provides supports for over 150 different currencies as well.

According to discussions surrounding the acquisition, PayPal’s interest in the company stems from its ability to power them by offering a greater number of services to marketplaces. This, in turn, should bring new sellers to those platforms. Both companies also confirmed that there is minimal overlap between their client bases. The market seemed to agree with this potential synergy, as PayPal’s stock had a bump after the announcement.

PayPal’s Global Outlook

The big takeaway from this acquisition is that PayPal sees a lot of opportunity in global online payments. That’s backed up by an even larger acquisition the company made not long ago. PayPal paid $2.2 billion for iZettle. This European company specializes in fintech and provides a strong backbone for omnichannel commerce around the globe.

As far as what this all means for your business, something to carefully evaluate is if opening up to a more global customer base makes sense. While selling and shipping around the world does present some challenges, there are a lot of tools available that make it easier than ever to connect with very eager buyers in places outside the US.

If you want to learn more about this possibility for your business, be sure to read our previous post on going global. And if you’re concerned that your current payment processor may limit your ability to sell globally, it’s a great opportunity to explore different options for processing companies.

Posted on Monday, July 9th, 2018