Payment for order flow, or PFOF, makes it possible for Robinhood to let customers place trades with no upfront commission payment. Zero-commission stock trades helped the company win over millions of younger, less affluent customers and are now standard practice at many of Robinhood’s competitors. Payment for order flow critics—including the country’s top market regulator, Securities and Exchange Commission Chairman Gary Gensler —are wary of the practice. They argue that it poses a conflict of interest for brokerages, because the brokers can either collect more money for selling their customers’ order flow or pass that money on to customers in the form of price savings on their trades. Last month, Mr. Gensler said the SEC was reviewing payment for order flow, fueling speculation among some market observers that PFOF could be banned.

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