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When you consider that estimated North American internet usage makes up less than 20% of total internet usage[1], I don't think PayPal has anything to worry abo
by froo 14y ago
When you consider that estimated North American internet usage makes up less than 20% of total internet usage[1], I don't think PayPal has anything to worry about for a long time.
They are the almost defacto standard for personal payments online will keep them in the top spot for a long time due to network effects. Without a serious shift in usage, its hard to see that changing any time soon.
As an anecdote, my grandmother passed away last week. Her 86 year old sister back in Germany asked us if we had PayPal this week so she could send flowers for her funeral. It may not be a "hot" company in the US, but its still highly relevant to the vast majority of internet users, even ones that are only just venturing onto the web.
[1] I don't know the actual number as everywhere I've looked suggests between 13% and 15%. I figure less than 20% is a safe bet.
- ChrisNorstrom 14y ago"PayPal has [nothing] to worry about for a long time." I'd be careful, sometimes these articles are alarmist and over-reacting but a lot of times they predict the downfall of companies years ahead of their demise. Digg, Palm, Kodak, Yahoo, etc... A lot of these companies all display similar patterns right before things start to get bad for them. They stop innovating, they start getting surrounded by competitors, they get too comfortable thinking they're "too big to fail" and have the "network effect". Look at Palm alone, it was a leader in PDAs and in a few short years it was gone. The internet and technology are changing at extremely fast speeds. One year you're safe, the next year a competitor has taken your market share. It all happens so fast now. Easier to start, easier to implement, easier to set up, and little by little it's no longer hard for your client to switch payment systems.
- jacques_chester 14y agoDigg, Palm, Kodak and Yahoo are poor analogies to PayPal. None of those companies had positions which were defensible against a better technology. PayPal does. PayPal's barrier to competition isn't technology. It isn't service. It's not network effects. It's that they've done the infinitely tedious schlep of jumping through thousands and thousands of hoops all over the world to make it possible for me, an Australian, to do business with a person in the UK in USD if that's what I require. Nobody else can do that unless I arrive with millions of dollars in tow. Nobody else comes close. I desperately want that to change.
- true_religion 14y agoThat's not really an insurmountable barrier. Once someone wins the US market, they'll use their treasure trove to enter other markers and then in a few short years we'll see paypal vanish.
- moe 14y agoOnce someone wins the US market, they'll use their treasure trove to enter other markets Sorry, reality disagrees. Hardly any of the american Paypal-competitors give a flying fuck about the rest of the world. And many of them have been around for the better part of a decade. The would-be gorillas 'Amazon Payments' and 'Google Merchant' are US-only and US/UK respectively.
- true_religion 14y agoNotice I said "won" the US market. Paypal is still completely dominant in the US. Amazon Payments? Google Wallet? They're no where near even proving better than Paypal in local competition.
- Tloewald 14y agoSo you're a startup and your model or base is international — and all you need to do is wait a "few years".
- true_religion 14y agoIf your model and base are international, you're overreaching. All startups have to start small and evolve from there. Once you prove your ideas in one market, its easier to duplicate your success in others. I would not advice a startup to take a lot of funding, then attack the international market initially. That kind of pre-mature scaling is reminiscent of Webvan.
- Tloewald 14y agoInternational might include not in the US.