What’s Next for PayPal?
Finally, PayPal has split from eBay to become a single entity, which the former says had blocked its revenue potential and masked PayPal’s value. After the split, PayPal will face some tough challenges from strong competitors – Amazon and Alipay.
PayPal has Acceptance.
Most merchants are capitalizing on the ever-rising popularity of mobile to help customers discover what they are looking for on the Internet. Unfortunately, they’re missing out on converting such shoppers due to the challenges customers face while filling out forms and entering payment information. This is where PayPal gets ahead of the curve while most of its competitors are chasing that space. The PayPal brand already has the distinction of being widely accepted as a payment solution worldwide, and the payment button already appears on various merchant checkout pages.
According to PayPal’s investor desk, it enjoys a presence on 67 percent of the leading mobile apps. The company says it has widespread reach and acceptability among 10 million merchants and developers that have payment enabled apps. PayPal statistics reveal that cross-border sales contributed to $14 billion in volume in 2014. No other competitor comes even close.
While Amazon has always been focusing on attracting as many merchants toward its virtual walls, it hasn’t been able to appeal to any big Internet retailers. Amazon’s payment options also have not found a place on merchant’s checkout pages. So, this clearly shows that Amazon still has a long way to go in terms of coming even close to PayPal for acceptance.
Now let’s take the case of Alipay, which has widespread acceptance, but only in China. Though it is a better, bigger version of PayPal, it is still limited to China and the Chinese. Alipay has a long way to go in order to attract non-Chinese consumers outside of China.
Is PayPal just a Payment Button?
But pigeonholing PayPal as just a payment button isn’t correct. CEO Dan Schulman describes that his company is a not merely a platform for making retail payments, but it is focused on democratizing the movement of money from consumers to businesses. PayPal’s acquisition of Xoom strengthens the CEO’s statement that enables US consumers to send and receive money outside the country.
PayPal and its leading competitors agree on the importance of using connected devices for transforming the point of sale experience. PayPal’s apps help consumers check into a store and be served with offers and checking out via the app.
Emerging Channels & Devices.
PayPal, Amazon, and Alipay are monitoring the mobile revolution closely and have placed their bets on mobile phones and apps so that they can seamlessly operate across connected devices. Each has invested in apps that run on all types of devices and operating systems. The trio seems to be focusing on enabling a mobile device at a merchant location, without the use of technology.
With the rate of cart abandonment soaring high, PayPal believes that it is seeing volume skyrocket and higher conversions wherever its button is present.
PayPal’s guarantee of buyer payment protection gives it an extreme edge over its competitors. It is not only a platform for merchants and consumers to pay and be paid, but also a way to secure online transactions by offering payment only upon delivery. It’s also but one method of sending money from australia to the uk.
As far as getting consumers into stores is concerned, time alone will tell how PayPal fares and solves offline conversion problem for merchants. I am sure they have some great ideas.
What about Customer Engagement?
Customer engagement and experience is a critical factor in attracting sales and getting repeat business. Let’s be fair, PayPal has a lot of hard work to do in terms of customer engagement. Its engagement strategy requires a sound plan, and partnerships, especially with financial institutions. Since it is a single entity now, PayPal may find it easier to partner with financial agencies, which will be like an opportunity to add more users to its roster.
Friendly to Merchants
Consistent payments experience is critical to helping customers move with ease across various shopping channels. The payments scheme that merchants are more likely to go with are the ones that bring them customers because this determines how customers want to pay them. If customers have confidence in the PayPal brand, then they will be more likely to use it and that makes businesses want to offer PayPal as a payment option.
Undoubtedly, merchants aren’t too happy when presented with new payment options for the fear of having to change their entire systems to accommodate the newcomer. It is important to deliver a more consistent and familiar(or trusted) payments experience to make it easy for consumers to access the channels they use for shopping. After all, the saying goes, “If it aint broke, dont fix it!”
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