PayPal CFO Says Appetite For Acquisition Will Continue Into 2020

Payments company PayPal recently acquired Chinese payment platform GoPay, and it wants to continue to complete such deals, according to a report by The Wall Street Journal.

The company wants to pursue acquisitions throughout 2020.

“There’s a lot of opportunities to acquire companies inorganically,” Chief Financial Officer John Rainey said.

The GoPay deal, which was the acquisition of a 70 percent stake in the company, was completed Dec. 19.

“We’re pleased to complete this historic transaction, which enables us to broaden our participation in such a dynamic market,” Dan Schulman, president and CEO of PayPal, said in a statement in tandem with the announcement of the deal, in which PayPal bought 70 percent of the Chinese firm. “This important step will allow us to be a stronger partner to Chinese financial institutions and technology platforms.”

In November, PayPal negotiated a deal to acquire Honey, a shopping and rewards platform, for about $4 billion.

The company has been aggressively pursuing deals like this and has spent about $7 billion so far. The company will continue to look for deals between the $1 billion and $3 billion range.

Moshe Katri, a research analyst for Wedbush Securities, a financial services firm, said it was important for PayPal to execute the deals carefully.

“There’s a long list of privately held companies in this space,” he said. “The challenge is to find the right fit.”

The payments sector has seen a lot of expansions lately, as well as heightened valuations.

Other deals in the payments ecosphere include Fidelity National Information Services (FIS) buying Worldpay for around $35 billion, and Global Payments spending $21.5 billion for Total System Services.

In 2018, PayPal bought Swedish tech startup iZettle AB for about $2.2 billion. Katri reiterated that PayPal needs to be careful and selective when looking for acquisition targets.

Rainey agreed.

“We are very mindful of that,” Rainey said. “For every transaction that we do, there are dozens that we turn away.”