PayPal and Pinterest deal is not taking place

A couple of weeks ago, reports emerged that PayPal was planning to acquire Pinterest. The potential deal clearly revealed that the fintech giant could be more heavily focused on the social commerce department. It could greatly benefit from the purchases made on social media platforms. PayPal certainly wants to penetrate this segment and implement its payment platform. However, Pinterest and PayPal aren’t happening after all.

In case you not aware, Pinterest always focused on social commerce. Instead of just being a competitor for Instagram as some have pointed in the past, it was more a website for people to find style, wedding, and decor inspiration. The platform also offers some social commerce systems, and that probably raised PayPal’s interest.

While PayPal backs out from the Pinterest deal, a report claimed that there are other potential partnerships or even smaller acquisitions that may help the company to reach its goal.

Reason For PayPal Picking Pinterest

As per the reports, PayPal’s main goal in trying to purchase Pinterest has to do with the empowerment of its transactions. For those unaware, PayPal shares fell sharply after multiple media outlets reported late last month that it was pursuing Pinterest.

According to estimates, the deal could go up to $45 billion. Curiously, the shares have bounced back as soon as PayPal cleared the things saying that it wasn’t acquiring Pinterest at this time.

Apparently, the failed transaction probably had something to do with PayPal’s desire to take control of the whole purchasing process. As per Moshe Katri, an analyst with Wedbush Securities, it could have made PayPal very active, probably “stickier” and ultimately generate more volume on the platform. It would keep serving both consumers and merchants.

However, PayPal didn’t necessarily need Pinterest to accomplish its goal of being a one-stop financial product, the analyst suggests. The company acquired online coupon company Honey in 2019, and this purchase helped PayPal better understand consumers and its shopping behaviors. In the end, PayPal can still become the transaction tool for Pinterest. The two companies can build a partnership and save billions of dollars in the process.