PayPal Acquires Hyperwallet – And There is An Amazon Twist

Last month PayPal purchases iZettle to gain a larger market share of the small business traditional retail market. On Tuesday, the company announced it agreed to purchase Hyperwallet for $400 million in cash.

READ MORE: PayPal Agrees to Acquire iZettle for $2.2 billion

The acquisition of Hyperwallet enhances PayPal’s payout capabilities, improving the company’s ability to provide an integrated suite of payment solutions to eCommerce platforms and marketplaces around the world.

Consumers are shopping and using online marketplaces almost daily because these marketplaces are bringing consumers and providers, from retailers to freelancers, together in ways that weren’t previously possible. In fact, marketplace sales accounted for more than 50% of global online retail sales in 2017 according to Internet Retailer. This is a tremendous market opportunity for us, one we are uniquely positioned to capture.

Bill Ready, COO and EVP, PayPal

Upon closing, PayPal and Braintree merchants will gain 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.

“We are thrilled to be joining forces with a powerhouse like PayPal. Combining Hyperwallet’s advanced payout capabilities with PayPal’s scale will bring increased value to both Hyperwallet’s and PayPal’s customers. This is an outstanding opportunity to supercharge Hyperwallet’s growth and further our mission to pay the planet.”

Brent Warrington, CEO, Hyperwallet

Guarding Against eBay and The Amazon Connection

While PayPal continued to claim that the loss of eBay won’t impact their business as they believe they will continue to transact a large number of eBay sales on the PayPal platform, it is also very clear that PayPal is hedging its bets.

READ MORE: PayPal in Denial of eBay Payment Intentions?

When most eCommerce sellers think of marketplaces, they think of Amazon, eBay, Etsy, Bonanza, Newegg, and other goods based marketplaces that offer sellers the opportunity to list their products and make them available to millions of shoppers.

In the tech world, Gig Economy companies such as Uber, Lyft, AirBnB, and FreeeUp, are considered marketplaces. Hyperwallet has been servicing this group of “service marketplaces” and apparently that is what made them an attractive acquisition for PayPal.

The company had signaled in investor conference calls that they are actively seeking expansion in marketplaces and are willing to use Mergers and Acquisitions to expand its portfolio of services and market segments.

READ MORE: A Look Inside the Q4 Earnings Calls from eBay and PayPal

But there is an interesting twist when it comes to Hyperwallet.

The company’s recent expansion in the Asia-Pacific market which includes deals with Freelancer.com, Marketplacer.com, and Tripfuser also includes a deal with Amazon Australia.

In December, Hyperwallet signed an agreement with Amazon Australia to support international seller disbursements from Amazon’s Australia-based marketplace.

So, PayPal has worked itself into the Amazon juggernaut through Hyperwallet.

Will it last past the acquisition? Is it the beginning of an expanding partnership? It certainly adds a little intrigue to the deal.

What is your thought about PayPal buying Hyperwallet? Head over to our Facebook Discussion Group or use the comments section below.

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