Similar to how Google dominates internet search, one firm manages the majority of the electronic money and e-commerce transactions in the US. And that’s PayPal.
PayPal may have begun as a small California start-up in 1998 but, after eBay acquired it in 2002, it focused on peer-to-peer payments for independent eBay sellers. In 2015, it parted ways with eBay. Today, it owns brands that include payment processor Braintree, international remittance service company Xoom, and mobile app Venmo. These subsidiaries are responsible for managing payments for StubHub, Airbnb, Sephora, Uber, Hulu, and Macy’s, among others. Many experts in the world of FinTech now regard PayPal as one of the most powerful corporations in the world.
However, while PayPal may be the most influential FinTech company in the world, with the advent of cryptocurrency, the blockchain, and other decentralised technology, there will be more options emerging for consumers in the near future.
A New Player in Town
PayPal dominates commerce but cryptocurrencies such as bitcoin are changing how people view money. CNBC have reported that bitcoin’s worldwide market cap has surpassed the value of both Morgan Stanley and Goldman Sachs, approximately $110bn.
PayPal is still largely regarded as a P2P app. It would be more accurate, however, to describe the company as a payments provider that offers a mobile wallet platform and business services. One of its services, PayPal Working Capital, provided loans by utilising its own information in order to determine the creditworthiness of its applicants, with traditional metrics ignored. Users are able to both deposit and send real money through such partners as Rite Aid and the Western Union. Collaboration with MasterCard and Visa recently saw PayPal accounts become an integral part of the credit card companies’ worldwide strategies.
PayPal’s Failed Bitcoin Trial
For a short time, PayPal partnered with Coinbase, a cryptocurrency exchange, to support payments with bitcoin. Mainstream demand was limited at that time, before the cryptocurrency boom that occurred this summer, so the partnership ceased.
Since then, bitcoin has grown to be accepted at an increasing number of sites, including some of the most well known ecommerce brands, such as Overstock and Expedia. In fact, so many people are taking to bitcoin that it’s barely been out of the news. Online casino sites, such as bitcasino.io have especially taken to the cryptocurrency. Users can get started with a m฿ 2,000 welcome package with over 1,300 games from which to choose, such as Temple Cats andChimney Sweep, all by using bitcoin.
Where From Here?
When everything is taken into account, the future of the financial landscape would appear to be a realm of mobile wallets with blockchain assets and FinTech apps such as PayPal. The days of banks assuming guardianship of our finances are over. As well as payments, PayPal further offers accounting tools and business loans. It’s expanding its options in mobile loans rapidly. Reuters reported that the firm has lent over £3bn to 115,000 companies as of August this year.
While it may be difficult to identify a sector beyond the reach of PayPal, its fintech throne is far from guaranteed. USTART, a cyptocurrency startup, launched its token sale in November to crowdfund its blockchain alternative to the consumer side of PayPal. While there may not be a risk of a monopoly or a regulatory threat just yet, there is more than enough competition with blockchain technology.