PayPal / Hyperwallet Mobile Payments Deal Draws Interest

June 25, 2018         By: Steven Anderson

One of the biggest pieces of news in the mobile payments sphere in the last few days has to be PayPal’s purchase of Hyperwallet. Part of a growing slate of such purchases PayPal has made of late, the Hyperwallet purchase has drawn plenty of attention in the field. Both Mizuho Payments and Keefe, Bruyette & Woods (KBW) dropped word our way on their stances on the matter, and what they’ve got to say suggests this was a smart move.

Mizuho pointed out that PayPal picked up Hyperwallet for $400 million, and opens up several new options for PayPal including “multi-currency payment distribution capabilities,” as well as “multiple disbursement options,” one of which includes a PayPal balance itself.

This could make it an excellent tool for the growing gig economy, though PayPal is already being used somewhat on that front as it is. Given that Hyperwallet already has several major accounts—including Expedia and Stella & Dot—the end result should not only give PayPal more tools to offer, but also more direct potential connections at which to offer them.

Additionally, Mizuho noted that Ingenico Group was eager to buy Hyperwallet for the same $400 million, so it’s a safe bet that PayPal didn’t overpay, or just by a bit.

KBW, meanwhile, expressed its belief that “…the acquisition makes strategic sense…” for PayPal, especially given that it would “…enhance the company’s ability to fund directly to multiple payment channels, which is something that (it) is not able to do today.” Better yet, KBW notes that the deal “…does not affect financial guidance as the unit is profitable on a standalone basis per management.”

So basically, PayPal dropped a hefty slug of cash to buy a profitable company that has several useful contacts and will give PayPal the ability to roll out more functions to its end users. That sounds like a worthwhile use of a hefty $400 million, and one well in keeping with its recent moves to help it divorce from eBay, at some point, maybe.

PayPal’s Hyperwallet acquisition should prove helpful going forward, especially as the gig economy continues gaining ground. New features seldom hurt, and Hyperwallet should give PayPal plenty of those.