The PayPal Opportunity


  • Recent agreements have been largely misunderstood.
  • PayPal will ultimately be one of the few digital wallet winners.
  • New management understands the long-term opportunity.

Manole Capital Management

The PayPal Opportunity

September 2016

What's in your wallet?

Stealing the tagline from Capital One's popular ads… look at the credit and debit cards in your wallet. You might call them your Visa (V) or MasterCards (MA), but each is really a line of credit between you and a specific bank. That issuer can be JPMorgan (JPM), Wells Fargo (WFC), Bank of America (BAC) or any of thousands of banks.

Banks feel dis-intermediated from their clients, as the vehicle you use on a daily basis is not recognized as their valuable service.

A traditional wallet:

If you are anything like us, you still carry around wallets like George Costanza from the hit TV show Seinfeld.

Today, for everyday transactions, the plastic cards in your wallet still matter, and for many, cash and check remain a regular payment medium. With advances in smartphone technology, the traditional wallet is likely to change; however, over the next 5 to 10 years, payment apps will proliferate. Looking forward, the average consumer might put a half dozen favorite retailers' apps on their phones. Since most people do not want to clutter their beautiful iPhones with 25 to 30 different apps, some merchants will get this valuable real estate because they offer great promotions or deals.


The modern smartphone is a remarkable invention. An all-encompassing device that fits in your pocket, it can seamlessly do all the tasks that once required separate technologies. It was only a matter of time before the payments industry began to think of better ways to utilize advancing technology and this wonderful device. The growing importance of the smartphone as the go-to computing device for every digital activity is the goal. Why not incorporate mobile payments and wallet technology into this powerful (always present) device?

Phones as

This article was written by

Manole Capital Management is a boutique asset manager, based in Tampa, Florida. Launched in 2015, Manole Capital exclusively focuses on the emerging FINTECH industry. Warren joined Goldman Sachs Asset Management in 1994, following graduation from Lehigh University. On GSAM's Growth Equity team, Warren was a portfolio manager on various '40 Act mutual funds, as well as having primary responsibility for certain companies in the financial and technology sectors. After nearly 20 years at GSAM, Warren left and joined Logan Circle Partners in 2013. Leveraging his accounting background from Lehigh University, Warren received his Certified Public Accountant license in 1998. In 2004, Warren received the Chartered Financial Analyst designation.

Disclosure: I am/we are long PYPL, V, MA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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