Credit cards are beginning to take a back seat to PayPal. PayPal is the internet based credit company that was mainly used to purchase goods on eBay. eBay purchased PayPal in 2002 for a staggering $1.5 billion. Since that time, PayPal has quickly gained in popularity.
The allure of PayPal is in its slogan; “The Safer Way To Pay”. Consumers using PayPal enjoy the added sense of security that the internet company provides. With over 15 million consumers experiencing identity theft between 2005 and 2006 it is no wonder that PayPal is becoming increasingly popular. With PayPal, consumers are not required to give out information.
“Consumers are afraid to give out their credit card information” Richard Feinberg said. Feinberg is a professor of retail management at Purdue University.
PayPal are now not only used for eBay purchases but for other online purchases as well edging out a market once dominated by Visa and Mastercard.
Following PayPal’s lead, Google Checkout is hoping to carve out a niche in this lucrative market.
While PayPal leads the way in online purchases in the United States, they are hoping to break into the markets abroad.
Several countries are benefiting from broadband access and as a result online sales in these countries are expected to explode. PayPal wants to be there when it occurs and of course the traditional credit card companies are following suit.
For the time being, the average consumer still needs a credit card, but many expect that PayPal will begin to explore the world offline in the quest for more profit.
For the time being, American consumers are finding that PayPal provides an easier and safer way to make online transactions. What was once exclusive to eBay has extended to other online stores and auction sites. Major manufacturers are even accepting PayPal payments.
Tags: paypal, credit cards
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