The all-star list is insane, it keeps growing, and yet PayPal still that can't seem to do anything new.
PayPal's fat margins aren't justified by the service they provide, only by the lack of alternatives. But new alternatives are launching much faster than eBay can respond.
Square has become a well-run, genuine alternative. BitPay / Coinbase are still very small, but the cryptocurrency wildcard at least shines a light on what money transfer should cost.
Amazon is quietly expanding their payments footprint. The famous Bezos quote seems appropriate here: "Your margins are my opportunity."
Apple exposing their Touch ID API will level the playing field, exposing PayPal to more competition and margin pressure. Look out if Apple starts using their billion-credit-card database to get into payments themselves.
If Facebook/Whatsapp can payment-enable messaging and do it at a lower cost, PayPal's raison d'etre starts looking pretty questionable.
And now eBay leaking personally-identifiable information on 150 million customers isn't helping maintain trust or brand image. The breach couldn't have happened at a worse time.
We could be looking at the Blockbusterization of eBay and PayPal. The stock price is starting to reflect this reality, so look for more key people to leave in coming months.
How would the valuation to user actually function?
Would one allot some % of their transactions to Square (above both fee and margins) into the pool. Then they earn various mechanisms to increase their pool share (including buy some/debting some from square) and then be able to use all of it as in-system credit? Where goods and services were exempt from taxation due to there being no "actual US currency transacted"?
It would be very interesting to see if such a system results in the truth that labor-resource is the true vector of tax - not money. Unless that is already established and I am just ignorant....
PayPal's raison d'etre is not in Peer to Peer money exchange. Its more on strong merchant integrations, partnerships, and relationships. In fact PayPal draws a small loss on p2p products. If you want to compete with PayPal its through strong merchant integrations which many startups have not succeeded in doing. When braintree made inroads into a segment of b2b products, PayPal acquired Braintree.
P2P is more or less a adoption hack/growth hack for a payments company. Merchant integrations and risk models are where its at.
There won't be one grand disruption (except maybe Amazon or Alibaba), but there will be many small vertical disruptions, like Etsy.
The real question is why Facebook is poaching from EBay and not vice versa.
If I call in with a problem, give me someone that can both answer my questions and put fingers on the keyboard and fix said problem.
Not really that hard. No more indian call centers, no more useless CS, no more hiding need-to-know information behind the all-consuming veil of "fraud protection" (something its competitors don't seem to have that much of an issue with).
That's 90% of your problems fixed right there. The other 10% would be the inconsistent enforcement of rules.
Think about the order of magnitude:
(1) An average 2.5% transaction fee on a $100 dollar e-bay transaction is US$2.50 in revenue.
(2) The cost of sending someone a "paper bill" in the mail (fully amortized) is approximately US$2.00, or 80% of the revenue from a $100 sale.
(3) at $8.50/hour, a minimum wage worker would expend >80% of revenue by spending 15 minutes to help you.
(4) A "quick fix" with a paper-trail (2+3 above)quickly turns the transaction negative ($2+2=$4>$2.50) at the margin.
(5) Since every fix is an instant loss, profit maximization implies "fix minimization"--at least as one component of strategy.
(Disclaimer: This is all made up math.)
Combating fraud is hard, at scale with half the worlds petty criminals seeing you as the obstacle between them and their victims you're in for a rough ride.
I wouldn't judge them too harshly. (Even if I personally will never use them ever again I do appreciate the kind of issues they have to deal with.)
PayPal is changing now, a LOT. After David Marcus and Bill Scott, things are now in motion for the better! I'm sure in an year or two, we'll see PayPal in a much different way than what it is now.
I'm sure there's some little things they could dabble in but realistically the only things people want from Paypal are less fees, less account closures/theft from account holders, faster transfers and overall better customer support.
Paypal doesn't need to innovate, they need to fix the obvious issues that relegate their service to a "barely workable until the instant someone better comes along" paradigm.
dude, how can you say this this year.
The amount of friction within a company like Paypal I would imagine is quite high. Not even those at the top of companies like these can change things at the flick of a switch. Things move very slowly in large companies, this is why smaller startups are able to come along and shake things up so easily before being acquired. It is how it is.
I wonder what ended up happening inside PayPal since this post.
But that's what it means...? Or do you mean like in the literal sense, like is your comment about illegally hunting wild animals? (which nobody would ever confuse for a second.)
If you are talking about the same thing everyone else is (hiring) then what do you mean by "actual poaching is illegal"? I am trying to really give you the benefit of the doubt and assume you know what you're talking about, but I just can't make heads or tails of your comment...
One reason that I think it's so inapt is that the longer-standing definition of poaching refers to an illegal activity. Not only is it illegal, but the illegality is a fundamental part of the meaning of the term. Also it places an odd emphasis on the company that the person is leaving (i.e. this was against their wishes), when they are the third most important entity in this transaction.
According to Merriam-Webster, to poach means "to attract (as an employee or customer) away from a competitor". No indication of illegality here.
I find it an inapt analogy to describe a transaction in a competitive job market.
Poach (verb) "to trespass for the purpose of stealing game; also : to take game or fish illegally"
The license is apparently valid throughout Europe though so maybe other countries have poorer bank transfer systems and this would be better.
[0] It's paywalled, so techcrunch discussion: http://techcrunch.com/2014/04/14/facebook-emoney-whatsapp-re... , FT article : http://www.ft.com/cms/s/0/0e0ef050-c16a-11e3-97b2-00144feabd... , google search for it (dodges paywall) : https://www.google.co.uk/search?q=facebook+targets+financial...
How so? With SEPA[1] it's both easy (European wide bank account number) and free (might not be the case if both accounts use different currencies though, but in euros it's free).
That just makes me wonder more why they went for Europe first, it seems to be impossible to monetise pretty much anything except cross currency.
https://www.linkedin.com/today/post/article/20140609203227-3...
I'm kind of bummed to see him doing good things with a product I consider a core part of the services I use and then leave to join a product I don't much care for.
What's great about Paypal is that it's good for both business and personal. Facebook is horrible for making that separation. I couldn't see myself using Facebook over Paypal. Though most important is the adoption. If it's easy and everyone is using it, then I suppose that could change my mind.
Good luck to all involved.
I mean, if FB was serious about chat, wasn't there an exec at a chat-focused company that would have been a better fit?
Also, why would the President of PayPal leave (his Top-dog position) to take on a head of a mere department at another company? Also seems odd...
They could do a pretty good job of it too, what with facebook knowing who you are (within reason) and who your friends are they could set this up in such a way that they could side-step the biggest problems with payments through paypal.
The tell-tale will be when facebook registers as a bank somewhere.
Edit: hello downvoter, feel free to disagree a bit more verbosely.
