PayPal continues its spending spree with Hyperwallet acquisition

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  • Money transfers giant acquires Hyperwallet for $400m
  • Move comes after buyout of Jetlore and iZettle

International money transfers colossus PayPal has announced the acquisition of fintech e-commerce money transfers firm Hyperwallet Systems Inc. for approximately $400m.

The deal expands PayPal’s already huge offerings to businesses seeking solutions for processing and managing their mobile and online payments.

Hyperwallet was founded 18 years ago in 2000 with the aim of assisting individuals and small businesses to receive payments for any goods and services they sold via online marketplaces, which include HomeAway (Expedia’s holiday home rental site) and Amazon.

PayPal has been on something of a spending spree of late, having recently acquired the artificial intelligence-powered marketing firm Jetlore and Sweden’s iZettle (which cost it a princely $2.2bn – the biggest payout for an acquisition in the company’s 20-year history). The payments giant is, it would appear, continuing a bold bid to penetrate all corners of the cross-border payments market. Not long after the iZettle deal was announced, PayPal’s CFO, John Rainey, unveiled plans to spend $1bn–$3bn per year on new acquisitions, so this is no mere flash in the pan.

The addition of Hyperwallet (which includes private equity company Primus Capital amongst its major shareholders) to PayPal’s repertoire of options will equip the latter with a new end-to-end suite of payments services. Hyperwallet enables international payments across 200 countries using a range of platforms: transfers to PayPal accounts, bank accounts and debit cards amongst them.

The move follows recent in-house research by PayPal executives which demonstrated that supporting e-commerce firms and making new deals are two of the most potent drivers of growth for the company and will continue to be so for the foreseeable future.

PayPal’s shares have soared by 60% over the last twelve months and its market capitalisation recently broke $100bn, but it can’t afford to sit on its haunches. It is facing relentless competition from fintech startups, banks and mature tech giants like Apple Inc. and Amazon.

But it has positioned itself very well to fight its corner. Via its Braintree unit, it already manages money transfers for some of the world’s biggest online marketplaces, Airbnb and Uber Technologies among them.

Executives have calculated that the Hyperwallet acquisition will increase the payment leviathan’s appeal to customers even more. And there’s definitely gold in them hills: last year, the respected trade magazine Internet Retailer found that approximately half of all global retail sales occurring online happened on e-commerce marketplaces.

PayPal’s Chief Operating Officer, the aptly-named Bill Ready, said in an interview: “We see an explosion of marketplaces. We want to serve them with a full operating system for commerce."

Following the latest acquisition, Hyperwallet’s CEO Brent Warrington (along with around 300 of its employees) will move into their new PayPal offices. In a press release following the announcement, Warrington described his company’s decision to be sold to PayPal as an “outstanding opportunity to supercharge Hyperwallet's growth”.

Meanwhile, Ready highlighted PayPal’s distinguishing feature in comparison to other cross-border payments firms catering to marketplaces: PayPal has the ability to link those businesses to over 200 million PayPal account-holding customers worldwide.

Succinctly, he added: “The thing we uniquely do that no one else is doing is bringing both buyers and sellers to the equation.”

Andrea Barnes
Andrea is Communications Manager at FXcompared. Prior to joining FXcompared, she worked as a communications consultant for companies seeking guidance with their social media, marketing and digital… Read more

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