It seems that the little blue and white PayPal logo is literally everywhere. With 5G technology, increased interest in contactless payments, as well as the soaring popularity of mobile transactions, it is hard not to think PayPal is slowly but steadily replacing many other methods we used and love. Finding a PayPal casino, or an online retailer that supports this payment method, is easier than ever, so no wonder many assume PayPal is becoming the biggest online payment provider in the world. But what do the numbers say?
Fortune magazine lists PayPal as 134th on its Top 500 list of US corporations with the biggest revenue. In 2020, this online fintech company reached $21.45 billion in revenue. To put things into perspective, Visa, one of the most popular credit and debit card companies in the world, made only “a few cents” more – $21.85 billion. Skrill, another online payment company that is considered popular, hasn’t even managed to hit the billion mark and closed the year with $331 million. PayPal can definitely no longer be considered an ‘alternative’ method, as numbers pretty much show it hit the mainstream a long time ago.
It is no longer a payment method used only to buy trinkets on eBay, but a legit payment method accepted by both big and small merchants, individuals, and professionals of all kinds. If you choose to work on any of the online platforms, such as Upwork, PayPal will be offered as a recommended payout method on most markets. If you want to buy a shirt or concert tickets, PayPal is usually the way to go. Ever-present and instantly available, PayPal has a plethora of advantages compared to traditional payment methods.
What Helped the Number of Active Users Grow?
As of 2021, PayPal has 392 million active users, and in the year prior, it was responsible for processing the astonishing 15.4 billion transactions. Needless to say, these numbers are more than impressive. Just 20 years ago, PayPal was a complete novelty on the market, and many observed it with a dose of skepticism. Still, this popular payment method managed to revolutionize the world of finances forever.
To understand why customers all over the world accepted this payment method, it is important to dive into the world of online banking in the late 1990s and early 2000s. Credit cards and bank transfers were pretty much the only options. Slow, expensive, and often not adapted to the dynamic world of online purchases, they caused more headaches than necessary. PayPal gained a loyal following, and for a good reason. Its success didn’t happen by accident.
It was the first and the only company to offer refunds and a high level of customer protection in many markets. For customers participating in then-emerging online markets, this was a revolutionary feature. It is also the characteristic that makes it one of the widespread payment methods today. The fact that you can get a refund in case something goes wrong was without precedent.
Another reason why customers love PayPal is that it is safe, regulated, and available all over the world. It implements new features, security practices, and protocols before any other payment company does. But, despite all these benefits, some say PayPal is slowly losing the battle to some more hip payment platforms.
Is PayPal Losing the Battle With Smaller Payment Providers?
Truth be told, in the past 20 years, PayPal has reached a certain level of maturity that can’t be found with other companies offering the same type of service. In a way, it is more similar to traditional banks than e-wallets, mostly due to unfavorable exchange rates and relatively high fees one has to pay occasionally, depending on the type of transaction. Nowadays, when companies compete on who will be more user-friendly and provide more cost-efficient transactions, PayPal looks like a rhino in a room full of gracious antelopes. It sure is strong and powerful, but antelopes seem to be much more elegant and faster.
Even though some payment companies on the markets can be considered nothing but copy-cats, a fair share of them studied PayPal, took only the good features, and left the bad ones behind. In addition to that, many online payment platforms such as Wise, Revolut or Skrill, have fruitful and successful partnerships with credit and debit card companies (namely Visa and MasterCard), thus offering cash withdrawals for customers interested in such an option. At the same time, PayPal Card managed to offer a similar product only in several markets with very limited exposure.
Not Ready for Competition?
It is incredibly surprising to see a serious company being so lulled into its own domination. Despite having a mobile payment app that allows almost seamless transactions, it looks as if PayPal didn’t count on the popularity of Google Pay and Apple Pay. Gpay is coming close to 5 billion USD in revenue and is one of the top competitors for this payment giant. Google is one of a hell of a company that doesn’t compromise, and no wonder younger generations of customers accepted it before even thinking of registering with PayPal.
Regardless of all its flaws, PayPal remains probably the only online payment platform that has almost an impeccable reputation. This reputation is partially built on its good relationship with governments across the globe, but that is not something many customers will appreciate. Transparency will certainly please tax officers and customers looking for accountability of unprofessional merchants, but many freelancers, gamblers, gamers, and others who are trying to pinch every penny are already giving up on PayPal.
Does all this mean PayPal will start losing customers and experience a consistent decrease in the number of users? Definitely not. Human beings are slaves of their own choices, not to mention convenience. All users who already have accounts, or simply want to have a universal payment method for both online and offline transactions, will most certainly stick to it.