Apple Buying Paypal Makes Sense According To Analyst
The business world is ripe with news of mergers and acquisitions with from Disney acquiring part of 21st Century Fox to Elon Musk putting Tesla and SpaceX under one management. But one possible merger could make headlines according to one analyst: Apple acquiring Paypal.
According to Forbes, the tech giant acquiring the world's biggest online payment company makes sense once everything is considered. This is mainly due to Apple's introduction of Apple Payback in October of 2014 allowing users to pay for products and services using only their iOS devices.
Strategically speaking, PayPal's strong position in electronic payments could be a huge benefit for the company. However, a more pressing concern is the fact that Paypal also owns Venmo, a mobile payment service that allows US users to transfer money to one another using a mobile phone app or web interface.
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Apple Pay Cash, the Cupertino-based company's entry into the peer-to-peer payment market, directly competes with Venmo. While some good old competition is always welcome in the marketplace, it would be much easier for Apple to get rid of the competition by simply acquiring it.
As it stands, Apple is perfectly capable of buying Paypal although it will have to pay above PayPal's current stock price although it would be a massive move of equity on their part. Forbes took the liberty of running the numbers and, coupled with other non-financial benefits, revealed that buying the online payment giant is a very viable option for Apple.
Of course, this is just mere speculation and there is a myriad of things that can prevent such a merger from happening. For one, Paypal might not be willing to sell with CEO Dan Schulman already having said he's not too worried about Apple Pay Cash's encroachment on the market. Apple might not also be willing to take such a massive risk of buying a company with a market cap of $89 billion.
That being said, nothing is impossible, as in the case of Disney buying a massive constituent of 21st Century Fox. If Apple does make a push to merge with Paypal, there will probably be little consideration, at least from a financial standpoint.
