Competition for millennial clients has rapidly accelerated in the microinvesting space, and it has produced its biggest development yet, ushering a Silicon Valley player outside financial services into robo investing.
PayPal announced on Monday it is tying up with microinvestor Acorns, after investing about $30 million in the app last year.
The firm will offer consumers the ability to link to an Acorns account from the PayPal home screen. Users will be able to transfer funds, monitor investments, make withdrawals and manage their investment accounts from the PayPal site and mobile app.
Acorns, which has over 2.4 million accounts and an average account size of $921, rounds up users' credit and debit card payments to the nearest dollar. It invests that difference in the stock market.
The 5-year-old company charges $1 per month to maintain an account. The link to PayPal could greatly expand that reach, given PayPal has 218 million active customer accounts.
Acorns has been aggressively seeking to expand its services footprint. In July it added Adam Dell’s Clarity Money as a personal finance management partner, and acquired retirement savings tool provider Vault earlier this month.
Stash Invest, a direct competitor, also announced a retirement savings feature. Megabanks in recent weeks have also announced their own millennial-focused apps, with JPMorgan Chase and Wells Fargo introducing mobile-only banking options that also serve up PFM insights.