The world of digital – particularly mobile – payments is fast-moving and complex. And unlikely to get simpler any time soon. The question for players that are not called Apple, Samsung or Wal-Mart is: How do you keep up? How do you differentiate yourself? The answer for PayPal, at least, is to extend the functionality of the service in several different directions at once.
At the end of last year, the company’s frictionless One Touch service paid dividends with holiday shoppers, and some reports put the conversion rate for the service at over 85%, which is impressive by any standard.
More recently, PayPal made it possible for customers to top up their accounts at 7-Eleven stores. The company clearly understands that convenience is key to success.
Overall, the company’s revenue grew last year to $10.8 billion, which was driven by over six billion payment transactions, an increase of 24%. In the final quarter of 2016, revenues were $2.9 billion.
More recently still, PayPal has bought TIO Networks which will allow customers to pay a range of bills directly from the app. Whilst this is not for everyone, Dan Schulman, CEO and President says that “worldwide, more than two billion people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment.”
Whilst M-Pesa has often been touted as the answer to a host of problems facing unbanked customers, PayPal seems to be on that trail too, expanding the possibilities from person-to-person transfers to a fully-fledged payments platform for all.
Indeed, it is now commonplace to find the PayPal option on a range of websites, from travel to retail and it is actually quite compelling to use it, since you avoid the keying in of numbers, the re-keying in of numbers, dates, security codes, etc. Instead, it really is one click.
In the world of payments, where the giants – from Mastercard to Apple to JP Morgan to Wal-Mart to Starbucks – are playing, it is refreshing to see a service that has been around a while coming into its own, and finding a very definite niche in the mad world of payments.
The others should, perhaps, follow PayPal’s example and figure out exactly where their niche is – because with so many strong players, it is very unlikely that there will be one winner.