eBay 2013 Annual Report Download - page 51

America, AT&T (in association with Vantiv), Capital One, Shopify, iZettle, WorldPay, Payleven, Groupon, SumUp and others.
PayPal also faces competition and potential competition from:
Some of these competitors have longer operating histories, significantly greater financial, technical, marketing, customer service and other
resources, greater brand recognition, or a larger base of customers than PayPal, and may be also be able to leverage other affiliated businesses
for competitive advantage. PayPal's competitors may be able to innovate and 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 previously has offered free payments processing on transactions in
amounts proportionate to certain advertising spending with Google. We also expect new entrants, such as MCX, to offer competitive products
and services. In addition, some merchants provide such services to themselves. 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. In the U.K., the Payments Council has announced that mobile payments between bank accounts will be broadly
available beginning in 2014. 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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•
money remitters such as MoneyGram, Western Union, Global Payments, Inc., Xoom and Euronet;
•
bill payment services, including CheckFree, a subsidiary of Fiserv;
• services 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 Western Union's WU Pay, Dwolla, Acculynk, TeleCheck (a subsidiary of First Data), iDEAL in the
Netherlands, Klarna in several European countries, Sofortuberweisung (which recently has agreed to merge with Klarna) in Germany,
PayLib in France and the MyBank pan-European initiative;
•
issuers of stored value targeted at online payments, including NetSpend, Green Dot, PayNearMe, UKash and Qiwi in Russia;
• other international online payment-services providers such as AliPay, the PayU group of companies (owned by Naspers), PagSeguro
and Bcash (owned by Naspers);
• other providers of online account-based payments, such as Skrill, ClickandBuy (owned by Deutsche Telekom), Barclays Pingit in the
U.K., Kwixo in France, and Paymate and Visa PayClick in Australia;
•
payment services targeting users of social networks and online gaming, often through billing to the consumer's mobile phone account,
including PlaySpan (owned by Visa), Boku, Bango and Payfone;
• payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank
account, including PopMoney from Fiserv, which has a collaboration agreement with Visa, and ClearXchange (a joint venture among
Wells Fargo, Bank of America and JP Morgan Chase);
• online shopping services that provide special offers linked to a specific payment provider, such as Visa's RightCliq, MasterCard
MarketPlace, TrialPay and Tapjoy;
•
services such as Coinbase and Bitpay that help merchants accept and manage virtual currencies such as Bitcoin; and
•
cash.
•
ability to attract, retain and engage both buyers and sellers with relatively low marketing expense;
•
ability to show that sellers will achieve incremental sales by offering PayPal;
•
security of transactions and the ability for buyers to use PayPal without sharing their financial information with the seller;
•
low fees and simplicity of fee structure;
•
ability to develop services across multiple commerce channels, including mobile payments and payments at the physical point of sale;
•
trust in PayPal's dispute resolution and buyer and seller protection programs;
•
customer service; and
•
brand recognition.