Facebook can bring PayPal countless users if the two extend their existing partnership, according to MoffettNathanson. The social media giant as well as the internet payment service “a match made in heaven” could collaborate further in programs like WhatsApp, Instagram and Facebook Marketplace, the team of websites and obligations analysts wrote in a note Thursday.
Lisa Ellis and Michael Nathanson said in a post,
“We roughly estimate that possible WhatsApp and Instagram partnerships could bring 40 to 60 million new users to PayPal’s network each, and the Marketplace partnership could generate on the order of about $1.5 billion of incremental revenue for PayPal”
There’s an addition which was made to the above statement, it says,
“It is quite likely that Facebook and PayPal announce a significant expansion of their partnership sometime in the coming months,” the analysts wrote. “Arguably, they need each other now more than ever.”
Stocks of Facebook rose 1.2 percent and PayPal climbed 0.8 percent in premarket trading. MoffettNathanson set its cost target for Facebook at $165 and PayPal. The goals indicate gains of 14 percent and 15.6 percent, respectively, from Wednesday’s closing price.
Facebook and PayPal’s venture started to enable customers to connect their accounts and also use PayPal to shop on Messenger. As reported by CNBC, In October 2017, they expanded the venture by allowing Facebook Messenger users to send and ask money straight in the app by using their PayPal accounts. The connection was positive for both companies, bringing in new customers for PayPal and boosting Facebook business.
MoffettNathanson called PayPal could generate millions more new users by powering obligations in WhatsApp at the near future.
MoffettNathanson mentions that,
“Even if only 5 percent of the 1.3 billion WhatsApp users are converted, PayPal would capture 65 million new users – a 28 percent growth in its base,”
Collaboration opportunities could come from allowing Instagram users to get items they see in their feeds without leaving the program and expanding their partnership from Facebook Marketplace, the analysts said.