In the past few months, PayPal has made some tremendous strides in the mobile payments space. As mobile payments will become huge in the following months – as asserted by both PayPal and eBay – the e-commerce service is making sure that it is prepared for the huge wave of mobile payment transactions. PayPal has even forecasting that this year alone will see over $700 million in transactions via its mobile payment system.
Even now the company seems poised to overtake its parent company, eBay, in terms of growth and size.
According to the New York Times:
PayPal accounted for 37 percent of eBay’s overall revenue in the third quarter compared with 23 percent just five years ago. EBay’s payments unit, which consists mostly of PayPal, had $838 million in revenue in the three months ended Sept. 30, up 22 percent from the period a year earlier. The auction and retail operations, which eBay calls marketplace, took in $1.41 billion in revenue during the same period, an increase of just 3 percent.
If the trend continues, PayPal will surpass eBay in terms of revenue by 2014, just a little over three years from now. As mobile payments and commerce grows even bigger, PayPal is looking to cement its role as a transactor for that particular business. Despite its recent success, there is still a long way to go:
Mr. Thompson said that there remained much to do at PayPal. Since payment systems are evolving so rapidly, he predicted that the next generation of consumers would be unfamiliar with something as basic as a check. “We are literally just scratching the surface,” he said.
Credit card companies that have partnered with PayPal may be its biggest rivals in the new mobile payments space. Already, they have mixed feelings about PayPal’s success.
The competition is getting pretty fierce as well. Companies are banding together and using NFC payments for their transactions, and other companies like Square can enable credit card payments right on the spot with its smartphone attachment. Even PayPal’s own partners, like credit card companies, ultimately find competition in that users are finding more of an incentive to use PayPal versus a credit card.
As someone who likes simplifying and consolidating tasks, mobile payments makes life so much easier when dealing with payments and banking transactions. While PayPal certainly has its flaws – deep, annoying flaws – I can’t wait for the day when I make the majority of my payments and transactions with my smartphone using a service like PayPal.