PayPal has worked to build support from retailers and consumers, positioning it well in the competitive e-commerce game, writes Lauren Freedman, senior vice president of digital strategy at Astound Commerce.
PayPal's recent success can be tied back to increased consumer demand for convenient transactions: 45 percent of consumers report alternative payment options as “Very Important” when making purchases on mobile devices, according to recent research by Astound Commerce.
In Q1 of 2017, PayPal reported that transactions grew 51 percent on tablets and mobile -- which means the company processed close to $32 billion in charges from these devices. And Venmo, its peer-to-peer payment platform, is on a similar path (doubling its volume from the first quarter of 2016).
What is the key to its success and recent growth?
Retailer buy-in. Alternative payment options are only as effective as the retailers and platforms that support them. Astound Commerce’s report found that PayPal has a significant market reach advantage: PayPal is currently supported by 88% of the top 100 e-commerce sites,.
Established Consumer Trust. As a pioneering player in the alternative payments space for almost two decades, PayPal has not only earned the trust of retailers, but also consumers. In fact, consumers prefer PayPal over banks for online payment and peer-to-peer options, according to research by Auriemma Consulting Group. As major data breaches ensure that security is top-of-mind for consumers, PayPal is considered a brand that effectively protects customer information.
Streamlined, Familiar Interfaces. Consumers won’t use alternative payment options if they aren’t as frictionless as possible. PayPal has mastered this desire for ease and convenience through simple interfaces and its One Touch payment option, which allows customers to make purchases in one click, without entering payment or billing info. As PayPal’s market share grows on mobile and tablet devices, these streamlined options are crucial to its success especially as more users get on board with Venmo to pay their peers.
As shoppers continue to choose flexible payment options on mobile devices, laptops and even in stores, competitors would be wise to learn from PayPal’s success. Consumer trust, retailer support and a convenient, streamlined platform are all must-haves for any brand looking to expand market share in the alternative payments space.