PayPal's
Astonishing Arrogance PayPal's
Astonishing Arrogance Everybody that follows the payments industry knows that there is a
massive albatross that hovers over every innovation that comes to the
market: PayPal. In its mind, there is no realm of payments that PayPal
cannot conquer and control. The company chafes when other payment
innovations, like Square or the Google Wallet, gain press acclaim.
PayPal is almost never first to the market with payment innovations and
it does not think it needs to be. The company watches how the market
evolves, takes a step back and releases similar offerings, trusting to
its brand name and ubiquity to cover the cost.
That is precisely what PayPal has done with its new mobile payments
system, PayPal Here. It has all the innovation of a three-day old
muffin. Instead of a "Square," it is a triangle. PayPal Here also puts
credit card scanners Jumio and Card.io have also been put on notice.
Going forward, can PayPal rely on its brand name to create a payments
empire or will its arrogance eventually lead it to a path of ruin?
In a blog post, PayPal says, "So, you're asking, how is this different
from other small business mobile payment solutions? The key
differentiator is that it comes from PayPal, a trusted brand in the
online payments industry with more than 100 million customers around the
globe and years of proven payment innovation ... ."
Reading PayPal press releases and blog posts is an exercise in patience.
If there is a more passive-aggressive technology company, readers would
be hard pressed to find it.
PayPal Here is the company's first foray into the mobile credit card
reading space. It will have a dongle (the triangle) and the ability to
scan a credit card using a smartphones camera. As mentioned above, these
innovations are nothing new.
PayPal thinks it can differentiate itself with a 2.7% interchange rate
(1.7% with a PayPal debit card) but as we have seen in the market, mild
swings of interchange have not affected which companies ultimately
succeed (well, not until we get to the mystical land of "interchange
zero").
A more secure card reader is offered by UPC. See more information here. Card swipe interchange starts at 1.54% + $0.10 so PayPal's solution is a costly one.