Google Wallet’s Strong Penetration Could Threaten PayPal In Mobile Payment Space

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It’s almost the complete of one year of Google Wallet services and it has made a strong penetration among mobile payment users. On the other side, its competent “PayPal” also seems very aggressive this time. Recently, it has signed an agreement with 16 major retailers worldwide to roll out the mobile payment through PayPal. In addition to these, the global e-commerce business giant has teamed-up with four software providers to get an access to 50,000 SMBs worldwide.

Besides PayPal and Google Wallet, there are some other incumbents in the market such as American Express, Master Card and Visa, which have intensified the competition in mobile payment era. Currently, Master Card, American Express and Visa are also following the same strategies what Google Wallet has implemented. We can’t ignore this time to another start-up such as Square, which is approximately to achieve a status of $4 billion valuation soon.

However, PayPal has its own merits such as a significant users base and technologies, which is quite suitable to make its presence in the entry level. The main advantage is here that if customers have once signed for the PayPal, they can conduct transactions using mobile phone number and PIN—for this, they would not need to be worried about carrier or phone changes. The same thing is validated for merchant side also, means for the transactions, they will not need to change their sale point hardware.

In terms of user base and deployment, Google has a relationship with 25 national retailers and it has 140,000 worldwide locations. On the contrary, PayPal has 110 million users and it has made $7 billion mobile payment transactions this year. PayPal is currently accessing about 16, 000 U.S. locations–a meager in number compare to Google Wallet. However, it has announced to   tie-up with 16 more retailers this year in order to compete with Google wallet. Apparently,   Google has gambled on NFC technology, currently, Sprint is only the carrier in the U.S. which is offering “Google Wallet” services on six Android devices.

In comparison to Google Wallet, PayPal has still stuck with lack of locations. Indeed, the company will have to work hard for the proliferation of its business worldwide.

After subtle investigation, we might find that Google is not primarily focusing on  the mobile payments, but it has focused on advertisements, simply, it’s about pay-for-performance marketing. In addition to these, Google’s purchase of TxVia (a mobile payment company) in the last month, might reinforce “Google Wallet” to create a fierce competition among their rivals.

Anyway, it’s not easy for Paypal to stand against Google Wallet and other  rivals such as American Express, Master Card and Visa. Indeed, a very tough is ahead for mobile payments players.



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