Morgan Stanley said PayPal’s digital payments in the area of e-commerce were already ahead of its competitors, and the gap was starting to pull up.
Morgan Stanley analyst James Faucette says PayPal added eight more merchants in the top 500 internet retailers recently, giving it a presence at 82% of top 500 merchants. And rival Amazon’s Amazon pay is losing 4.
PayPal now has a market capitalisation of about $100 billion, 100 times times when it went public in 2002, and the number of users has increased from 15 million to nearly 250 million. It is estimated that while PayPal is struggling in China, where payment methods such as WeChat dominate, it handles up to 30 percent of all e-commerce transactions in the rest of the world.
Faucette went on to say that other forms of payment like bitcoin still don’t see a market share change, according to the report. Considering that consumers continue to switch to online shopping, it is estimated that such a trend will support PayPal’s overall payment volume growth. PayPal currently accounts for 82% of the top 500 online retailers in the United States, while Amazon Amazon pay is just 12%. At the same time, only 4% of non-Amazon retailers accept Amazon pay. He noted that only 4 of the top 500 retailers accept Bitcoin.
As more and more e-commerce shifts to the mobile side, PayPal is in a good position to win more and better positions in the retailer’s checkout process due to the success of one touch.
At the same time, PayPal is exposed to multiple competitive pressures and risks:
1. Diversified payment channels and international competitive pressure.
2. It is difficult to obtain a long-distance payment license in other countries except the United States.
3. Risk of ceasing cooperation with eBay.