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PayPal does have competition

I blogged yesterday about how PayPal is not as pally as they used to be. Some might say that this is because they are the last man standing in the last chance saloon of online payments, but that is not true.

There’s always new competition.

In fact, a year ago, I talked about one big new competitor in the form of Amazon.

Amazon’s checkout service was offered to anyone as a simple drop and click payments app to plug into their website.

So how’s it going?

Going well apparently.

According to website Amazon Strategies Checkout by Amazon, or CBA for short, is offered by over 300 retailers, with several of the top 500 internet retailers using this as their preferred payments tool including:

  • Toolking.com – a company that does some great work with social networking and has some innovative micro sites like Tooliday.com;
  • Patagonia – a manufacturer that sells direct and via retailers like REI, Dick's Sporting Goods, etc; and
  • Jockey – a manufacturer that sells direct.

The comment Amazon Strategies makes is how successful they are doing with online distribution for manufacturers who want to sell direct, and there “are lots of manufacturers that want to sell direct to consumers”.

Too darned right.

Maybe that’s why some of the big heavyweights in our digital planet are getting into payments, with Apple rumoured to be offering iTunes accounts as a method of payment for digital downloads on third party websites.

Similarly Facebook has often been mooted as thinking about getting into more commercial activities, such as extending their credit system to online payments, as have Twitter.

All in all, PayPal does have competition so they’re not alone out there. But, historically, they’ve always managed to keep ahead of the competition. We shall see what happens this time if, and when, the big heavyweights take them on.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • The sticking point with both Amazon and PayPal as a solution is that both require the user to leave the site to complete the transaction. That means that if, during the payment process, the customer changes his/her mind (I know – wow, that sounds unlikely, eh?) then they have to navigate back to the original site to make some changes to the shopping cart. Or if there are some items that they’ve just realized they’ve forgotten and want to add; they can wind up getting billed multiple times or ordering the same thing multiple times (see The Economist’s very flawed online subscription process).
    If iTunes, Facebook or Twitter can come up with tech that can reside on a merchant’s site and complete the transaction there without having to shell out to the mothership site (and yeah, I know that means relying on someone else’s SSL certificate and all that), then they will have a compelling product to compete with the established guys on more than just bringing their installed user/payer base with them.

  • Eric R

    To add to paypals great list of features that puts us one step closer to people using a solely online banking system as opposed to traditional banking. Paypal has now added check scanning to their list of features. There is info I found at: http://www.android-advice.com/2011/deposit-checks-with-paypal-app/