PayPal launches robo-advising service
PayPal is jumping on the financial wellness bandwagon. The digital payments platform is partnering with Acorns, a micro-investing app, to allow customers of both firms to use the PayPal platform to manage their Acorns investments.
Robo-advising services, like PayPal's new service, are seen as ways for employees to save more for retirement.
When consumers log into their PayPal accounts, they’ll be able to sign up for or link their Acorns account right from the PayPal home screen. Once the accounts are linked, customers can transfer funds from their PayPal accounts into their investment accounts.
“PayPal and Acorns are both committed to helping the up-and-coming achieve their financial potential — together, we see a future where anyone can grow wealth,” says Acorns CEO Noah Kerner. “Our strategic partnership with PayPal supports our shared mission to deliver next generation financial solutions to our customers.”
PayPal has more than 218 million active account holders, while Acorns has 2.3 million account holders. The partnership will allow customers to invest any amount of money into their investment accounts.
A small number of U.S. PayPal customers already have access to the new service and it will be rolled out to all U.S. users in early 2018.
PayPal, along with Rakuten Fintech Fund and other investors, invested $30 million of venture capital into Acorns in April 2016. The investment helped Acorns expand its automated investment features to make gathering and growing funds easier. Acorns has a program called Invest the Change, which rounds up everyday purchases and invests the difference. It also has a digital magazine called Grow to help millennials make better financial decisions.
The majority of Acorns investors are between the ages of 18 and 34. Acorns allows customers to automatically invest in a low-cost, diversified portfolio of exchange-traded funds offered by some of the world's top asset managers, including Vanguard and BlackRock.
PayPal helps people send payments or get paid electronically through its PayPal platform, including Braintree, Venmo and Xoom.