1
Qualitative 1
Hannah Maritz
September 5, 2021
Liberty University
2
Qualitative 1
PayPal’s Competitive Advantage
PayPal is a service that allows a person to pay, send money and take payments. All you
must do is enter your PayPal account in your credit or debit card and then you can easily pay by
selecting PayPal at the checkout, login to your PayPal account, and send your money. PayPal is a
digital payment company that generates money from online payments. Clever acquisitions like
Venmo, Braintree, iZettle, Hyper-Wallet, modest, or more have led to PayPal's growth. PayPal
was one of the first dotcoms that have undergone many-era technological advancements. "Over
40 million people have used Venmo’s over the last 12 months as one of the country's most
popular banking applications is the digital money transfer service "There was an error
(Rudegeair, 2019). "PayPal checkout is the dominant online payment solution, 78% of the top
500 online merchants provide it, and 92% of PayPal's total trading services "The volume of
payment" (Demos, 2019).
One benefit of PayPal is that it is a large multiservice platform and not that diversified in
terms of its rivals. Over the years, PayPal has developed and accepts its payment services as a
large network of customers and businesses. "Around forty collaborations have been struck by
Schulman with rivals including Visa, MasterCard, and Google Pay to increase PayPal's reach"
(Money, 2018). PayPal is faced with rising pressures from established fintech businesses,
younger companies, and the banks and credit card issuers themselves as our world shifts farther
towards the digital payments industry. That many consumers with payment cards that use PayPal
have established a wallet that already safeguards PayPal against these attacks. Another advantage
is that customers are motivated to join up for PayPal as they see more traders accepting it and
more buyers utilize PayPal to offer it as an option. For new firms in the digital payment space,
this competitive benefit is difficult to overcome. The one-touch checkout procedure minimizes
3
Qualitative 1
friction by cutting down the number of clicks needed to buy and save payment credentials on
many devices is an additional benefit of PayPal. Consumers and retailers are immediately
registered with One-Touch and no updates are required.
PayPal employs NFC, which is an innovative method to pay for products utilizing this
new technology. Consumers may now use their cellular phones to buy and to pay electronically
for products and services. When they established their Google Wallet in 2011, the first firm to
adopt this technology was Google. "There is also NFC technology in hardware that allows a
phone reader to wave before a specific credit card reader to complete a transaction on phones
powered by software of Google" (Sidel & Efrati, 2011). Google tried to shoot this product during
2011, however, after a few years, another competition came into action. The concept of Google
Wallet was introduced in Apple Inc and is digitized and replaced with a contactless payment the
customer credit or debit card chip and PIN transaction.
In the mobile and internet payment sector PayPal is even more competitive than Google
and Apple. PayPal has expanded its market share substantially. "PayPal has 24% online
payments in the US, according to Celent LLC's banking institution advice" " (Mangalindan,
2006). Since PayPal is a mobile and online payment provider, they have developed a brand that
has provided the customer with access and convenience. PayPal is a customer-based and helpful
business for its competitive edge. The primary competitive advantage is the capacity of this firm
to connect to current websites, goods, and services. Rudegeair discussed the cooperation that
eBay and PayPal had established: "And eBay's collaboration enabled PayPal to retake advice on
an existing, large-scale business" (Rudegeair, 2019). Since PayPal may piggyback previously
existing brands, it also creates a new market for PayPal, offering a certain degree of credits and
4
Qualitative 1
confidence. In a service like eBay, consumers seek ease and simplicity. PayPal can enable
customers to utilize a brand that trusts consumers with a new service.
Retail Banking’s Foray into Online Banking
PayPal's entry into the deposit check can lead to the drain of trillions in tiny sums now
landing on bank accounts and being utilized for cash reserves and lending. PayPal is looking for
the float and new clients (Cheques, 2010). "The three main banks have thus fought over the way
in which people transfer money and make payments. "Being the popular PayPal offering is a
new service from Bank of America Corp., Wells Fargo & Co., and J.P. Morgan Chase & Co. The
credit card, overdraft, and checking fees each year amount to billions of dollars" (Sidel, 2011).
The new payment network Zelle is established by five of the largest US banks and
additional banks and credit unions are expecting them to join next year. This network enables
millions of bank clients via their cellphones to transmit money personally. "This improves on
Venmo, which informs users quickly that a transfer of cash is underway but takes time to shuffle
funds around bank accounts" (Reuters, 2017). Though banks are still having a major edge for
technological enterprises. The large bulk of the money is held by banks. Apps like Venmo are far
less money transferred than banks, and digital payment processes are of modest value via non-
financial companies. By adding Zelle banks, client loyalty is built up and their checking and cash
costs are simultaneously reduced. Eventually, when other banking companies join up with Zelle,
all clients must provide their mobile phone or e-mail address to another individual. However,
Venmo can still claim more users than some of the major financial institutions in the United
States with more than 40 million active accounts. Bank of America Corp. said that in the first
quarter it had an active digital user base of 37 million. The number of active digital users was
29.8 million for Wells Fargo & CO. JPMorgan Chase & Co., which claimed 51 million digital
5
Qualitative 1
users in the first quarter, was the only major US bank with a greater digital presence than
Venmo" (Rudegeair, 2019).
There is a big historic development in the financial sector. In recent decades, with the
introduction of online banking institutions, banks have experienced significant technical changes.
Online banking is a key shift and an evolution in how the lives of consumers are made easier.
Because internet banking facilitates financial activity for consumers through a phone or a
computer. "The notion aroused the country's potential consumers' attention progressively from
1981 forward" (Sherman, 2019). "80 percent of banks in America have taken part in the
development of internet banking as the years lead up to 2019" (Ensign & Jones, 2017). Online
banking is becoming increasingly common in today's culture. Every existing bank offers online
banking services; every branch of the bank is obsolete. Online banking enables users to use their
cellular device or computer to handle their money online. Consumers need not currently visit a
branch at a bank because internet banking has been determined by consumers to use it simpler,
freer, and better to track their expenses. This technology enables online banking to complete
activities in 3 to 5 minutes that can last for 20 minutes. Internet banking's convenience and
efficiency are only some of the numerous advantages of online banking.
6
Qualitative 1
Reference:
Cheques, please: PayPal wants the float. (2010). The Economist (Online),
Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-
com.ezproxy.liberty.edu/docview/850841989?accountid=12085
Demos, T. (2019). Wall Street Is Once Again Chummy With PayPal. Retrieved from
https:// www.wsj.com/articles/wall-street-is-once-again-chummy-with-paypal-
11571870510?mod=searchresults&page=3&pos=9
Ensign, R. L., & Jones, C. (2017). How Bank of America Ditched 1,597 Branches Across the
U.S. from https://www.wsj.com/articles/how-bank-of- america-ditched-1-597-
branches- across-the-u-s-1505646000.
Mangalindan, M. (2006). PayPal Prepares For a Challenge From Google. from
https:// www.wsj.com/articles/SB113918924045565647 .
Money in your purse. (2018). The Economist, 429, 71. Retrieved from
http://ezproxy.liberty.edu/login?url=https://search-proquest-
com.ezproxy.liberty.edu/docview/2156319864?accountid=12085
Reuters. (2017). 5 of the Largest U.S. Banks Are Launching a Venmo Competitor.
Retrieved from https://fortune.com/2017/06/12/paypal-venmo-zelle-jp- morgan-chase/
Rudegeair, P. (2019). PayPal Shares Jump on Earnings: 'What's The Bear Case Again?'. from
https:// www.wsj.com/articles/paypals-results-put-charge-in-
share-price-11571935696 .
Sherman, E. (2019). Online Banks Battle Big Banks With Low Fees.
from https://fortune.com/2019/06/20/online-banks-fees-trust/.
Sidel, R., & Efrati, A. (2011). Big Banks Join Battle for Online Payments.
https://www.wsj.com/articles/SB10001424052702304066504576343870105406768.
