From CNET: PayPal, which eBay purchased in 2002 for $1.5 billion, enjoys huge growth as online and mobile payments take off. Compared with eBay's marketplace sales growth of 6 percent last year, PayPal's revenue jumped 19 percent, to $7.9 billion. That faster growth means PayPal, for now a unit of its parent, will likely become the larger company by market value after the break-up. Marking that change, on Tuesday night, S&P Dow Jones Indices said PayPal will join the S&P 100 -- an index of some of the largest US companies. The company it replaces: eBay.
The divorce will let PayPal explore expansion in the $22.5 trillion worldwide retail market, where e-commerce is a small, but growing, sliver of sales. Thanks to an operating agreement, PayPal will keep its critical position as eBay's main payments service for five years, allowing PayPal to hold onto its biggest customer even while shopping around for other dates. On top of that, PayPal has become one of the most trusted and recognizable names in digital payments, according to surveys by Wedbush Securities, giving it a big advantage over rivals.
But PayPal is facing more competition, as tech giants Apple, Google and Amazon, payments networks Visa and Mastercard, and a slew of startups including Square are building up their own digital payments services and trying to catch on to a huge shift in how consumers spend their money and merchants take payments. PayPal will have to run even faster if it hopes to maintain its leading position.
"There's a proliferation of different choices that consumers have, whether its Apple Pay or Visa wallets," said Hill Ferguson, global head of PayPal's consumer business. "We continue to move the ball forward to make sure consumers know that there's a good reason to choose PayPal when they have that choice."
View: Article @ Source Site
