PayPal may acquire social networking site Pinterest for 45 billion and evolve into a “super app”

Alipay was once called "China PayPal", but now PayPal seems to be more and more like the "US version of Alipay".

According to Bloomberg News on October 20 , payment giant PayPal is planning to acquire social media company Pinterest for $45 billion, which may be the largest acquisition ever made by PayPal. According to people familiar with the matter, the purchase price is approximately US$70 per share. Negotiations are ongoing, and a deal may not be reached.

▲ Picture from: TechCrunch

Pinterest is a social networking site for image sharing, and the number of visits ranks TOP5 among similar sites. In April 2020, Pinterest launched a new shopping function. Users can click on the panel tab, search for keywords, or recognize images in 3 ways , Go to the "shop" tab and purchase products in stock. After that, Pinterest called itself the "social network for shopping."

The potential acquisition of Pinterest will promote the development of PayPal in "social e-commerce", which is also a market where technology giants such as Facebook are unwilling to lag behind. Pinterest happened to meet PayPal's expectations.

▲ Picture from: Pinterest

More importantly, this potential acquisition will serve as a piece of the puzzle, bringing PayPal closer to the "super application."

Paypal has made frequent acquisitions in the past two years, and e-commerce is a key factor. Since the epidemic, the boom in e-commerce has more than doubled PayPal's stock. The e-commerce industry has also brought fire to the infrastructure industries related to e-commerce, such as payment, returns, and logistics. This is where PayPal's layout has been in the past two years.

In November 2019, PayPal acquired Honey Science Corporation for US$4 billion in cash. The latter is a service provider looking for the most affordable online shopping products and has developed many plug-ins and software to track prices and discount information.

▲ Picture from: Honey Science Corporation

This acquisition has shown that PayPal hopes to gain a place in the field of e-commerce, not just competing with credit cards or Apple Pay on the checkout page.

On August 31, 2020, PayPal launched the "Pay in 4" program, which allows 4 interest-free installments, and the price of goods is limited to US$30 to US$600. In fact, PayPal may not care about buying in full or paying in installments. Either way, it will charge merchants similar transaction fees.

▲ Pay in 4.

The real purpose of PayPal is to compete head-on with companies such as Afterpay and Affirm that entered the game earlier. Last month, PayPal acquired Paidy, Japan's buy-and-pay platform, for approximately US$2.7 billion.

At the end of 2020, PayPal cooperated with Visa to launch the Venmo credit card. Venmo is a payment platform built around social functions that encourages users to share the experience after each transaction. It currently has more than 76 million active accounts, including a large number of millennials. Although its payment volume accounts for only a small part of PayPal's mobile services, it is expected to achieve rapid growth.

▲ Picture from: Venmo

On May 13 this year, PayPal announced the acquisition of Happy Returns, a provider of return solutions. The advantage of Happy Returns is that it has cooperated with hundreds of brands and has more than 2,600 offline return outlets, allowing consumers to easily return or exchange products purchased online.

PayPal's "buy, buy, and buy" includes more, including the acquisition of a cryptocurrency custody company, a wholly-owned holding of the Chinese business " Guopaybao ", the launch of the physical card reader PayPal Zettle, and so on.

▲ PayPal Zettle.

The items listed above already show that the payment giant has built a strong moat around its business. Various businesses have internal connections-PayPal Zettle is conducive to the establishment of loyalty between merchants and PayPal mobile wallets; shopping, payment, returns, logistics and other businesses are interconnected to achieve a virtuous circle.

▲ Picture from: Paypal

In short, PayPal is at the intersection of digital payment and e-commerce, transforming from a pure payment platform to a diversified e-commerce platform. PayPal CEO Dan Shulman stated earlier this year:

All these new products and services are actually transforming PayPal from a checkout platform into a fully functional super APP, or a digital wallet that surpasses payment, financial services, commerce and shopping tools.

PayPal also plans to add a series of new services, including high-yield savings accounts, check cashing services and stock investment functions.

Grapes are not the only fruit.

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