Key insights
- Mizuho downgraded PayPal due to the anticipated launch of X Money, a payments platform integrated into X, potentially impacting Venmo's P2P transaction dominance. Visa is expected to benefit from powering X Money's real-time payments. The long-term impact on PayPal's growth and valuation is a concern, while Visa and potentially Mastercard could see gains.
Investing.com -- A new payments platform backed by Elon Musk is shaking up the financial technology sector, prompting analysts to downgrade PayPal amid rising competitive risks.
Mizuho Securities has cut its rating on PayPal from “Outperform” to “Neutral,” citing the anticipated launch of “X Money,” a payments and financial services layer integrated into X.
Mizuho lowered its growth forecasts for Venmo and PayPal’s checkout business, and reduced its price target for PayPal to $50 from $60.
PayPal’s Venmo platform is seen as particularly vulnerable, given its strong reliance on U.S.-based P2P transactions—X Money’s primary entry point.
X Money is expected to launch as a multifunctional financial ecosystem, combining messaging, payments, and commerce—similar to China’s WeChat Pay and Alipay models.
The platform aims to leverage X’s massive global user base of 500–600 million monthly active users to embed payments directly into social interactions.
X Money represents a significant new entrant in digital payments, with the potential to reshape how users transact online.
While immediate financial disruption may be limited, analysts warn that its long-term impact could weigh heavily on PayPal’s growth and valuation.
While PayPal faces pressure, Visa Inc Class A (NYSE:V) is expected to benefit from the rise of X Money.
The platform will rely on Visa Direct infrastructure to power real-time payments, positioning Visa at the center of transactions such as wallet funding, transfers, and cash-outs.
Mastercard Inc (NYSE:MA) could also gain in the longer term if X expands to multiple payment networks.