PayPal was the initial disruptor of the finance industry when it emerged 18 years ago, however since then, the arrival of new technologies and social media platforms are pushing the payment service to innovate.
PayPal VP Ben Edwards said the industry is facing a “boiling ocean of disruption in”, in which the product is changing and the customer expectations are evolving rapidly.
“PayPal at 18 year’s old, is feeling its age. It was an original disruptor, but now it’s being disrupted,” Edwards said speaking at the ADMA Forum earlier today.
“It is being disrupted by many different sorts of companies who are coming at digital payments with different motivations and business models, like devices from Apple and Samsung. There’s also social network companies - like Facebook, and messaging apps – even traditional players like banks are getting their act together. There’s a whole new wave of startups too.”
With 80% of the Fortune 100 companies from the 1950s no longer existing and the competitive dynamic of the industry evolving, he believes reinvention is vital for PayPal’s future.
Edwards tells AdNews that partnerships and acquisitions have become a part of PayPal’s focus to respond to the demands of the digital age.
In 2013 PayPal acquired Braintree, which owns Venmo - a mobile app that allows users to transfer money using a mobile app. Edwards says Venmo has enabled PayPal to tap into the user’s move to mobile.
“The industry wants to move towards mobile devices as the ambitious form of payment so that is one big focus,” Edwards says.
“There is a lot of innovation and adaption that is happening in the user experience that is specific to the different types of payments that users want to make.”
As we move into an era where people prefer e-commerce transactions rather than physical cash, PayPal aims to be able to offer a product that offers a digital solution to social gestures such as tipping and bill sharing between friends.
“Technology allows users to add context and sociability to transactions that otherwise could be a little bit awkward,” Edwards says.
“You can approach payments with a very technological, transactional view, however they are often very personal.”
He says platforms like Venmo are allowing users to personalise their financial experiences, with people adding emojis to the description of payments.
While Edwards acknowledges banks are making leaps and bounds in innovation and companies like Commonwealth Bank and NAB are investing in major marketing pushes, he says PayPal isn’t shaking in its boots, rather ready to respond to the challenges the competition proposes.
"Waves of disruption happen and then the incumbents respond and it feeds the boiling ocean again," he said.
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