Four acquisitions in less than two months: How PayPal is changing the game

Four acquisitions in less than two months: iZettle ($2.2B), Hyperwallet ($0.4B), Jetlore (undisclosed), Simility ($0.12B). On their own, each company brings important assets to the table:

• iZettle: Integrated, cloud-based point-of-sale platform that provides omni-commerce capabilities to over half a million small and medium sized merchants globally.
• Hyperwallet: Disbursement platform that enables businesses to pay smaller contractors, suppliers, and individuals through a single integration that covers local currency settlement in over 200 markets. This is particularly important for marketplace platforms like Airbnb, Amazon, Uber, and Twitch that look to reduce payment complexity while supporting tremendous scale across radically dissimilar markets.
• Jetlore: Predictive marketing platform that enables online retailers to deliver more personalized experiences and targeted content to customers.
• Simility: Fraud prevention platform focused on E-commerce risk management and account take-over (ATO) protection.

Taken together, these acquisitions will accelerate PayPal’s evolution as a commerce platform — not just a payments company — by enabling and connecting four key elements:

1. Simplifying end-to-end payments: Enable any business to accept payments and disburse funds anywhere in the world, across any channel, while eliminating labor-intensive integrations via a simple set of APIs on one platform (Braintree)

2. Moving along the value chain: Integrate payments and transaction data to extend along the value chain and capture higher margin services, like marketing, credit, fraud management, and capital

3. Reinforcing customer stickiness: Connect and extend these capabilities into a single value proposition that keeps merchants on PayPal’s rails

4. Applying greater pricing control: Price based on the total value proposition versus individual parts — discounting one component as loss-leader to capture overall, higher revenue flows (eg, discount merchant acceptance in order to capture end-to-end flow)

Of course, these acquisitions did not occur in a vacuum. In roughly the same period, Adyen completed an enormously successful IPO, Square acquired Weebly, Adobe acquired Magento, and Shopify continued its meteoric growth.

PayPal has the capacity to become the ‘platform of record’ for the fastest growing segments in the market: digitally native brands, small and medium sized E-commerce businesses, and marketplaces. However, in this market, acquisitions are only the starting point — the degree of technical integration and business alignment will tell whether PayPal become THE platform or simply a collection of capabilities that fail to realize the greater sum of its parts.