PayPal rose 1.88% to $160.51 a share, while Square's stock price shot up 4.85% to $95.41 a share, after Guggenheim analyst Jeff Cantwell called out the fintechs for playing a leading role in funneling badly needed federal loan money to underbanked small and medium-sized businesses.
Square and PayPal have emerged as the leading players in ensuring money gets to these traditionally underserved businesses, Cantwell wrote.
The two credit card processing and mobile payment companies "are helping a sizeable - and underserved - segment of the economy," Cantwell said, according to Bloomberg.
Square has reported it has helped funnel more than $820 million in Paycheck Protection Act payments to more than 76,000 firms, while PayPal's CEO, Dan Schulman, credited the firm, during remarks at a conference, with helping make more than 60,000 PPP loans, the news service reports.
"This is a race to save jobs for the present and for the future," Schulman, PayPal's CEO, said in late April as he announced his company's participation in the federal government's PPP lending initiative. "We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period."
The federal government should require that fintechs be automatically included in the pool of lenders for future efforts to help small businesses, Cantwell contends.
Meanwhile, Citi analyst Peter Christiansen has boosted his price target on Square to $95 a share, up from $66 previously.