The explosion of available online payment methods is just one of the many factors driving the sustained growth of digital businesses.
Known as fintech, digital payment systems have become the pioneering new method to sending money or buying and selling goods.
Traditional financial systems have adapted to the growing innovation and convenience of financial technology by pivoting toward online and mobile apps. However, this is only the tip of the iceberg when we’re exploring the full scope of digital payments and some of their pros and cons.
Although PayPal is a digital fintech start-up, it feels like the company has been around forever. Not only were they one of the first companies to launch in this field, but their sustained growth has been a successful combination of top partnerships with early innovators like eBay and, more importantly, providing a convenient way for people to buy and sell goods online.
Given that they were one of the first significant innovators and opened the door for many people to understand how to use their money online, it still remains one of the best payment methods for millions of people around the world—and we’re going to look at the industries that still champion this method.
Positives Of PayPal
While you could do a deep dive into some of these components, we’ll just cover some of the main points for now. Convenience, of course, is the main one. If you use PayPal, you’ll know the simplicity involved. By simply registering with your e-mail and then attaching your chosen payment method, whether it is your bank account or credit card, you can buy and sell products using your e-mail.
PayPal has also branched into the world of credit, allowing people to pay off their balance in monthly instalments—thus adding an additional layer of flexibility. Perhaps one of the main reasons it took off so significantly is the security that underpins and validates the whole service.
Although many people saw the internet as the next big revolution, they were sceptical about entering their card or bank account information into such new technology and were still not entirely convinced by the level of security.
However, PayPal meant buyers and sellers could use their e-mail without additional financial or identifiable details. Sensitive card information wasn’t held on file, and they didn’t have to dig out their card details every time they made a purchase. While this might not sound like the biggest hurdle to overcome, the convenience, combined with the security and ease of use, helped propel it to the top of fintech and has helped it remain one of the most popular payment methods.
Casino Gaming & Sports Betting
Online casinos and sports betting companies have been able to ride the crest of the wave that PayPal facilitated. Many of the top online casinos faced several issues when they first launched in the late 1990s and early 2000s – but one of the biggest hurdles was how to offer a range of different payment methods for customers.
Traditional payments revolved around wire transfers and credit cards. Still, as we mentioned earlier, the boom in the number of bettors using PayPal surged, as all you needed was your e-mail and a link to your casino account. PayPal casinos operate in the same way as traditional casinos; you can still play roulette, blackjack, slots and other casino titles, it’s simply the payment method that changes.
Another game-changer that PayPal introduced was the PayPal guarantee—this meant that if you were scammed out of their money via a PayPal transaction, they would receive your money back. While this doesn’t apply to casino gaming, this type of investment and guarantee to their customers has resulted in growing trust and cementing their standing as one of the most secure payment methods.
E-Commerce
PayPal first sprung to prominence because of the way it facilitated payments on digital auctioning powerhouse eBay. However, it was soon adopted on a much grander scale by several smaller platforms, looking to connect buyers and sellers without involving a company in the middle.
A significant part of the digital payment revolution has been a result of smaller websites being able to connect sellers in digital marketplaces, whether it’s through designing gifts, significant global marketplaces like Amazon, or even social media marketplaces like Facebook. While the latter has come with many warnings over the last few years, it’s still a cheap way for people to get rid of things they don’t want, and many people use PayPal to facilitate these payments.
Food Delivery & Grocery Shopping
As more people do their main grocery shopping online and many of us use food delivery apps to order take-out at the weekend, PayPal has emerged as a popular way for people to get their weekend takeaway or pay for their supermarket shopping. Again, the reason for its popularity is that people can attach their PayPal to their DoorDash or Uber Eats account, use their credit upfront, and then pay off their balance at the end of the month.
While getting food and takeaways on credit isn’t the most advisable way to operate – there is a growing trend of people using PayPal as the primary payment method. They can attach it to their account and pay off the balance at the end of the month, and they don’t have to keep all of their sensitive card information on file.
Although many of these institutions are highly secure, using PayPal can give people added assurance and an additional layer of security which has helped it become their leading payment option. By cementing such a strong standing in global digital finance and making it easier for people to facilitate their day-to-day transactions, it was a natural step that people would begin using it for this purpose.
Investing & Finance
PayPal has adapted so seamlessly to a changing world that you can now invest in a number of assets via its app. Your PayPal wallet can hold several cryptocurrencies, and you can use the app to deposit and invest in various financial products.
Since the Bitcoin ETF and many other ETFs are approved, PayPal users can send money from their bank account and deposit it onto a range of investment websites and apps.
With more cryptocurrency ETFs set to follow and PayPal doubling down on branching out its platform to include crypto, it’s considered one of the best payment methods for retail investors looking to inject some of their capital into the market in stocks or cryptocurrencies that they like the look of. Of course, you should always do your due diligence, understand that the market is susceptible to massive swings, and only invest money you can afford to lose.
The company’s approach to investing and branching out into other currencies and digital assets is a symptom of why it continues to be so successful. They didn’t stay still in a market that continues to move at an electric pace, seeking out new heights and looking to pioneer in a number of new avenues.
Why Do People Prefer PayPal To Other, Similar Fintech?
Apple Pay and Google Pay are probably two fintech providers that have the potential to truly disrupt PayPal’s market share. However, even with these companies having trillion-dollar companies and investments behind them, they still don’t have the market brand, recognition, longevity in the market, or consumer trust that PayPal boasts.
Ultimately, these aren’t variables that you can’t buy; they come with time, and while Apple and Google Pay will undoubtedly get to a point where they’ll have more combined users than PayPal, it also doesn’t mean that people will flock to one over the other.
PayPal also has a universality to it, given that they’ve spent decades building their brand in over 120 different countries. While shiny new ideas might appear, it’s PayPal, with its globally recognised logo, guarantee, and market longevity, which means it’s still a huge hit for buyers and sellers. It doesn’t get much simpler than giving somebody your e-mail address and having money in your PayPal account which is the main driving factor behind its continued immense popularity.
Conclusion
With millions of people so accustomed to using PayPal, it will continue to be a force in the fintech industry for many years to come. However, it must fend off growing competition from Apple Pay, Google Pay, and cryptocurrencies.
However, given that they’re invested in cryptocurrency anyway, and the fact that you can also add PayPal to your iOS and Android wallets, they still have a very influential and significant part of the industry under their umbrella.
PayPal has proven that it isn’t always solely about the best technology; there also needs to be ease of use, convenience, and additional security. The simplicity of use is vital, and consumers don’t want to have to mess around with complicated deposit and withdrawal methods – which is why PayPal will play a huge role in these industries for many years to come. Who knows? They may even increase their market share in these industries. We’d say it’s more likely than watching them lose their appeal or influence.