Paypal likely to get hit by competition

Karthik Subramanian

Paypal, one of the largest payment processing companies in the US, is likely to face headwinds in the future due to increasing competition from old and new competitors in the payments arena.

paypal

The payments industry has witnessed a sharp increase over the last couple of years as more people have shifted to digital payments all over the world and the usage of cash has also come down drastically due to the pandemic when the users have been forced to stay indoors and have been forced to rely on e-commerce websites even for their basic needs. This has not only led to a huge surge in the payments volumes but also led to the huge influx of funds into the sector from various investors. This in turn has led to the creation of a variety of startups that have been able to take on the established players in this space with new and innovative products like BNPL and others.

We have also seen the established players pull up their socks and push ahead with their payments products while certain other companies like Amazon and Apple have also launched their payment products to seize the opportunity.  Paypal has also been trying to compete in this space with its products like BNPL and partnerships like those with Amazon but it is clear that it no longer is the dominant player in the industry. It relies a lot on e-commerce websites using its payments services but it is now facing a lot of competition in this industry from Shopify which has captured the small businesses reducing Paypal’s share here to a minor one.

All these are expected to hit the bottom line of Paypal in the coming months though its Venmo business with Amazon and its partnership with Amazon is expected to bolster its volumes. But with Amazon also having its payment platform, it remains to be seen how many of the buyers would continue to prefer to use Paypal for their payment purposes than using the native payment method within Amazon. We had also seen recently that the other large payment company, Paysafe, also reported not so good numbers over the last few months mainly because it has not upgraded its services and platform over the period as the industry continued to push ahead aggressively.

Read this next

Digital Assets

Silvergate dismisses speculation of trouble, says BlockFi exposure is minimal

Crypto-friendly bank Silvergate Capital claimed on a Tuesday blog post that it had minimal exposure to crypto lender BlockFi, which filed for chapter 11 bankruptcy protection this week.

Retail FX

Fidelity launches crypto trading for retail investors

Fidelity Investments, one of the largest brokerages in the world, has officially rolled out a commission-free crypto trading product for retail investors, starting with zero-fee trading for Bitcoin and Ethereum.

Digital Assets

ECB head calls for tougher crypto regulation after FTX collapse

President of the European Central Bank, Christine Lagarde, has called on lawmakers to start working on fresh crypto regulations to protect the financial system after the collapse of the FTX exchange.

Retail FX

CySEC updates rules for regulated brokers’ cross border activity

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Market News

Outlook for Gold: Can the Precious Metal Regain Power?

Gold set an all-time high at $2070 on March 08, 2022, when the price skyrocketed amid investors’ worries about the military conflict in Eastern Europe.

Crypto Insider

2022 Islamic Finance recap: as the space continues to evolve, blockchain stands to play a big part

Despite the global economy being ravaged by turmoil induced by the Covid-19 pandemic over the last couple of years, the Islamic finance industry has emerged relatively unscathed

Crypto Insider

Decentralized Exchanges and Pooled Trading Platform Applications

Decentralized exchanges are one-way blockchain companies take back the power of value creation.

Crypto Insider

How to maximize the safety of your digital tokens?

Digitalization is the future of the investment world. These are the most preferred and growing investments in the world.

Institutional FX, Interviews

FIA EXPO 2022: Interview with Trading Technologies

The derivatives trading industry has gathered in Chicago to attend the FIA EXPO 2022 on 14-15 November. 

<