Two of the first questions to ask are "could a competitor do better in this regard?" and, if the answer is in the affirmative, "Could a competitor replace PayPa

Two of the first questions to ask are "could a competitor do better in this regard?" and, if the answer is in the affirmative, "Could a competitor replace PayPal by doing better in this regard?" For a number of the most successful e-commerce fields (those having a large market that can be served in an almost completely automated way), the answer to the first is probably yes, but only in a tiny fraction of all transactions, and only by spending a lot more on human customer service. Consequently, the answer to the second question is probably no. There is also the asymmetry with regard to whether PayPal leans towards the customer or the vendor in a dispute. The former attitude tends to lubricate commerce, while the latter applies the brake, so it is actually to the benefit of vendors as a group, as well as customers (and also, of course, itself), if it does the former. If customers regard PayPay as the preferable way to do business, the pressure is on vendors to use it, while vendors who spurn it in favor other methods risk losing business to competitors. Because PayPal made a number of smart choices, it offers benefits to both sides of a transaction in the vast majority of cases, and that is pretty unusual (compare it to, for example, the credit rating agencies.) It is in a sweet spot where it would be difficult to compete either by reducing costs or by improving service, and that sweet spot is defined by what it is currently technically feasible to automate. That sweet spot will move with technological developments, and PayPal will need to adapt accordingly to stay in it.