This week, the market capitalization of fintech payments firm Square exceeded that of Goldman Sachs, the 151-year-old investment bank, for the first time.
Almost exactly two months earlier, PayPal surpassed Bank of America, the second biggest bank in the U.S., in market cap. That move made the online payments pioneer worth more than every American bank except for JPMorgan Chase.
The coronavirus pandemic has accelerated the penetration of digital payments across entire industries, resulting in double-digit revenue growth at PayPal and Square in the second quarter. Meanwhile, banks including JPMorgan and Bank of America have collectively set aside tens of billions of dollars for expected defaults.
“It’s pretty stunning to look at some of these fintech companies and the credit they’re getting today,” Devin Ryan, analyst at JMP Securities, said in a telephone interview.