Paypal Case Solution

Paypal has been a leading online payment company which uses a one to one payment network mode. A unique model such as this has helped Paypal grow from its inception at a drastic rate. They have won the trust of users to use their services to facilitate a secure medium to transact. With this said, they have acquired over 100 million registered users with much over 25 million active accounts. Paypal have been able to succeed because of implementing their three phase model which made sure that everyone right from the Ebay user, to an average American to international companies knew about the ubiquity of their business model and the benefits it provided. Safe and secure modes of transaction, quick signing up and payment release and reception, Online auction marketplaces, growing share of ecommerce, quick online payment were some of the reasons for its market share to increase drastically. However, this monopoly was trying to be brought down by other strong competitors like Google and credit card companies. Hence in response to this Paypal must start look to avenues outside their Ebay auctioning community to manage and contain such a threat. An important point to note here is that the nature of this business is such that along with containing a threat, it is imperative to launch strategies to expand to keep your market share. Hence, the questions that must be answered are:

1.  Whether to increase investment in the outside the Ebay community?
2. Target audience?
3. What changes to bring about to the existing product and its features to maintain a strong share?
4. Allocation of investments?

The news of Google entering into online payments can be noted as a serious threat to PayPal. Just like how google has its brand created for the internet search engine prowess, Paypal leads in this field so they have the upper advantage of having the support of the merchants. Credit card companies pose a potential threat in the coming years but the fact that most people are not comfortable sharing financial information online falls in their favor. This is where the merchants would hence need to make use of Paypal in the process to make use of ecommerce in the best possible manner. Paypal offers different products to different market segments which adds to their advantage. Even though the case states the intention of google is not to compete with a player like Paypal, the risk of such a venture having a backup of a large user group cannot be ignored.

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With the rise of ecommerce slowly starting to take precedence and the user groups globally appreciating it, Paypal should seriously start looking to invest more outside of Ebay communities to target a larger group. The domain for Paypal to enhance their offerings in opening up even more with online banking, online ad space, etc. increasing with the hour. So this is a market Paypal must tap in order to compete with the likes to new entrants to safeguard its position in the volatile and ever changing market. This may force new entrants to tie up with Paypal considering security requirements and the user mindset.