eBay 2011 Annual Report Download - page 45

PayPal
The markets for PayPal's product are intensely competitive and are subject to rapid technological change, including but not limited to:
mobile payments, electronic funds transfer networks starting to allow Internet access, cross-border access to networks, creation of new networks,
expansion of prepaid cards and bill pay networks. PayPal competes with existing online and offline payment methods, including, among others:
Some of these competitors have longer operating histories, significantly greater financial, technical, marketing, customer service and other
resources, greater name recognition, or a larger base of customers in affiliated businesses than PayPal. PayPal's competitors may respond to new
or emerging technologies and changes in customer requirements faster and more effectively than PayPal. Some of these competitors may also be
subject to less burdensome licensing, anti-money laundering, counter-terrorist financing and other regulatory requirements than PayPal, which is
subject to additional regulations based on, among other factors, its licensure as a bank in Luxembourg. They may devote greater resources to the
development, promotion, and sale of products and services than PayPal, and they may offer lower prices. For example, Google Checkout has in
the past offered free payments processing on transactions in an amount proportionate to certain advertising spending with Google. Competing
services tied to established banks and other financial institutions may offer greater liquidity and engender greater consumer confidence in the
safety and efficacy of their services than PayPal. In addition, in certain countries, such as Germany, Netherlands and Australia, electronic funds
transfer is a leading method of payment for both online and offline transactions. As in the U.S., established banks and other financial institutions
that do not currently offer online payments could quickly and easily develop such a service.
The principal competitive factors for PayPal include the following:
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• payment card merchant processors that offer their services to online merchants and multi-channel merchants, including American
Express, Chase Paymentech, First Data, Wells Fargo, WorldPay, Barclays Merchant Services, Global Payments, Inc. and Square, and
payment gateways, including CyberSource and Authorize.net (both owned by Visa);
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money remitters such as MoneyGram, Western Union, Global Payments, Inc. and Euronet;
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bill payment services, including CheckFree, a subsidiary of Fiserv;
• processors that provide online merchants the ability to offer their customers the option of paying for purchases from their bank account
or paying on credit, including the newly-announced ClearXchange joint venture among Wells Fargo, Bank of America and JP Morgan
Chase, Acculynk, Moneta, eBillMe, Dwolla, TeleCheck, a subsidiary of First Data, iDEAL in the Netherlands and Sofortuberweisung
in Germany;
• providers of “digital wallet” services that offer customers the ability to pay online or on mobile devices through a variety of payment
methods, including the new V.me announced by Visa, American Express's newly-launched Serve and Google Wallet;
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providers of traditional payment methods, particularly credit cards, checks, money orders and Automated Clearing House transactions;
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issuers of stored value targeted at online payments, including VisaBuxx, NetSpend, Green Dot, PayNearMe and UKash;
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mobile payments, including ISIS, Buyster, Mpass, O2 Money and Crandy;
• Amazon Payments, which offers merchants the ability to accept credit card- and bank-funded payments from Amazon's base of online
and mobile customers on the merchant's own website;
• Google Checkout (recently integrated into the Google Wallet service), which enables the online and mobile payment of merchants
using credit cards;
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AliPay, an online payment services provider which operates primarily in China but has announced plans to expand internationally;
• Other providers of online account-based payments, such as Skrill and ClickandBuy (primarily in the EU), Paymate and Visa PayClick
in Australia,
• payment services targeting users of social networks and online gaming, including Facebook and Hi5 credits, PlaySpan (which Visa has
acquired) and Boku;
• payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank
account, including ZashPay from Fiserv and Popmoney from CashEdge, both of which have announced collaboration agreements with
Visa (Fiserv recently acquired CashEdge); and
• online shopping services that provide special offers linked to a specific payment provider, such as Visa's RightCliq, MasterCard
MarketPlace, TrialPay and Tapjoy.
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ability to attract and retain both buyers and sellers with relatively low marketing expense;
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ability to show that sellers will achieve incremental sales by offering PayPal;