Paypal vs Square Stock: Unless you’ve spent the last few years as a hermit, you should be familiar with paying for merchandise using your debit or credit card. And, although you might not be aware that the merchant accepting your payment pays a fee, they do.
Enter the payment providers.
Electronic payment processing is BIG business. Not only is online retail experiencing growth, payment providers are also riding a wave of prosperity. Currently, the payment industry is a pretty rosy place to park your money. But what about the downsides?
Payment Providers At A Glance
Payment providers historically have acted as middlemen. They serve as a link between the merchant, the card issuer, and the cardholder. But today, that role is changing.
Digital payments, peer-to-peer payments, and a global market are forcing payment providers to diversify and rethink their business models.
Companies like Paypal [NASDAQ: PYPL] and Square are expanding their offerings into services and markets that were previously untapped, or non-existent.
But which is the better investment when comparing Paypal vs Square stock? If you were going to invest in this growing industry, which one stock should you choose?
Is PayPal Stock A Buy?
Paypal [NASDAQ: PYPL], founded in 1998, has grown massively since inception. Low-cost processing, mass integration of its digital payments platform across merchant websites and apps, and a global network has bolstered its rise.
Currently, Paypal’s payment processing platform accommodates more than 100 languages, 26 currencies, and operates in more than 200 countries.
Paypal is a giant. But it isn’t sitting still. Anticipating the changing needs of their customers is one thing Paypal does exceptionally well. In the process, the company has managed to disrupt the e-commerce and digital payments industries.
Paypal [NASDAQ: PYPL] has concentrated on three fronts:
- Expanding its reach via international partnerships,
- Merchant services (predictive intelligence, risk management, and data analytics); and
- Digital payments using an app known as Venmo.
Venmo is hugely popular with millennials because it’s accessible via mobile devices and it’s simple and easy to use.
With Venmo, sending money to friends, splitting things like restaurant tabs, or even paying a portion of a roommate’s utility bills, requires just a few clicks from an iPhone and the Venmo App. No need to carry cash or a credit card. Thanks to the Millennial crowd’s use and acceptance of Venmo, Paypal [NASDAQ: PYPL] has managed to knock it out of the park with its digital payment solutions.
Should You Invest in Square Stock?
Square [NYSE: SQ], founded in 2009, by CEO Jack Dorsey hasn’t wasted any time in laying claim to a large part of the payment processing market.
If Paypal made it easy to transact business with mass integration, Square took it one more step forward and integrated its payment solutions to include the iPhone.
Every Mom and Pop in the world who has an iPhone could accept credit cards, no matter how small the business, or low the volume.
Moreover, Square [NYSE: SQ], not to be outdone by Paypal’s Venmo, rolled out its app, simply called “Cash App.”
Over the last year, the Square Cash App has been hot on the heels of Venmo when it comes to user numbers, and it appeals to a wider audience too: the world’s unbanked and the emerging group of crypto-enthusiasts.
According to an article on BTCNews, Square’s Cash App and Bitcoin seem to be a marriage made in heaven, with Jack Dorsey increasingly bullish about Square’s ability to grow right along with the mass acceptance of bitcoin as a form of payment.
While still in its infancy, Square is also rolling out bitcoin deposit features for its wallet and Cash app. Square’s Cash App is opening the door to potentially millions of new customers and markets. The world of cryptocurrency is only just beginning to reveal its potential.
Not to be overlooked, the world’s unbanked population is not a small segment of the world, either. Estimates by the World Bank’s Global Findex database place this segment of the population at around 1.7 billion. Square’s Cash App, along with cryptocurrency access, place them in the cross-hairs for servicing this massive customer base.
Paypal Vs. Square Stock: The Bottom Line
Square and PayPal are in a neck and neck race to the top of the ever-growing person-to-person and mobile app segment of digital payments. Both companies are proving to be fierce opponents when addressing global currency needs but in quite different ways.
While Paypal [NASDAQ: PYPL] focuses on the millennial crowd and merchant data needs, Square seems to be reaching new highs as they cater to the unbanked and the rising tide of cryptocurrency payment demands.
So while both are great at what they do, you can only have one guy at the top. Or can you?
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.