By Lee Masterson contributing writer and Anne Howard, editor-in-chief
PayPal Expands Global Payment Network
A few days ago, PayPal and Hyperwallet announced that the two companies have entered into a 400 million dollars acquisition agreement, making it one of the biggest PayPal acquisition to date. The PayPal acquisition of Hyperwallet is expected to close in Q4 2018 and is intended to enhance PayPal’s global payout capabilities.
Bill Ready, COO and EVP of PayPal said in a press statement “By acquiring Hyperwallet, we will be able to provide PayPal and Braintree merchants with access to a comprehensive payments solution, including Hyperwallet’s localized, multi-currency payment distribution capabilities in more than 200 markets with numerous disbursement options, including prepaid card, bank account, debit card, cash pickup, check and PayPal.”
Founded in 2000 in San Francisco by Brent Warrington, Hyperwallet provides large and small companies a way to easily distribute payments among various platforms with a single integration, providing the payees a range of payment methods to choose including prepaid card, bank account, debit card, cash pickup, check and PayPal.
What does this acquisition mean for PayPal? It will give access the PayPal and Braintree merchants full access and control to localized, multi-currency payment capabilities in more than 200 markets globally.
Originally opened under the name ‘Confinity’ in 1998, PayPal has since grown to dominate the online payment scene. It’s also become the payment processing force behind many of the world’s largest marketplaces, including eBay, Airbnb, Uber, and many more. The acquisition of Hyperwallet will see PayPal facilitating some payments for global giants such as Amazon.com and WeChat.
PayPal is on a buying spree
In the past two months alone, PayPal agreed to four major acquisitions: iZettle for $2.2 billion, Hyperwallet for $400 million, Simility for $120 million, and Jetlore for an undisclosed amount.
PayPal’s objective is to help accelerate the company’s evolution as a progressive commerce platform, moving them away from being ‘just’ a third-party payment processor. The acquisition deal is expected to close in the 4th quarter of 2018.
Hyperallet growing globally
From its inception in 2000, Hyperwallet has moved from strength to strength, moving swiftly through several stages of international growth. The company has established offices in Austin, London, San Francisco, Sydney, and Vancouver, ensuring they have laid the groundwork to achieve significant international growth.
Hyperwallet CEO, Brent Warrington said in a press statement release “As a global platform, we’re committed to knocking down the barriers to cross-border payments and bringing our technology to marketplaces everywhere.”
When the acquisition closes, Brent Warrington and the rest of the Hyperwallet team will report to Braintree General Manager Juan Benitez.
Hyperwallet acquisition links PayPal to crypto
PayPal President and CEO Dan Schulman aren’t buying into the hype surrounding cryptocurrencies. Speaking at the Economic Club of New York in Manhattan back in March 2018, he openly said that cryptocurrencies are just an experiment for now and that many of them faced an uncertain future.
In fact, he seems more excited by the blockchain technology than cryptocurrency. Despite PayPal being so publicly opposed to using cryptocurrencies, on 1 March 2018 PayPal filed a patent application for an “expedited virtual currency transaction system”.
When news of PayPal’s patent application got out, crypto enthusiasts around the world immediately began speculating whether the online payment giant was considering launching its own cryptocurrency exchange.
PayPal CFO John Rainey quashed that notion quickly, saying to the Wall Street Journal “Given the volatility of bitcoin right now, it’s not a reliable currency for transactions.”
As far back as 2014, PayPal was showing signs of dipping its toes into the crypto waters, entering into partnerships with three major payment processors in the bitcoin space: BitPay, Coinbase, and GoCoin.
And now PayPal is in the process of acquiring Hyperwallet, which is known to have a strong history of being open to using virtual currency transactions to facilitate cross-border international payments.
In 2013, Hyperwallet entered into an agreement with the Earthport Network. The objective for Hyperwallet was to deliver more competitive online payment services. By 2015, Earthport entered into a gateway partnership with cryptocurrency Ripple (XRP) to facilitate international payments, which led to the payment network winning a Fintech Finance award in 2017.
While senior execs at PayPal aren’t saying much publicly, the patent application for a virtual currency transaction system indicates the online payment giant has big plans for the future of cross-border, cross-currency transactions. It remains to be seen whether PayPal might create its own cryptocurrency exchange service, or whether it will choose to create its own centralized cryptocurrency, with all settlements and exchanges conducted in the background via blockchain technology.
PayPal President and CEO, Dan Schulman said, “Blockchain will be the more powerful part of the landscape, and cryptocurrencies are just one application.”
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