PayPal set to crush competitors
November 4th 2009 02:04
Over the next 18 months, hundreds, even thousands, of new banking and payments products and applications will appear, designed by the online generation themselves, for the online generation.
It is a development that is truly frightening for the banks - users designing and making their own financial products.
This new development has arisen mainly because one online financial institution – PayPal - realised and admitted that it couldn’t research and predict what the online generation really wanted.
“In the past we tried to define the needs and make the solutions, but we don’t know the whole story,” says PayPal’s Australian managing director Dinuke Ranasinghe.
“We were trying to define the gaps in the market, the inefficiencies, the demand from customers, now we are leaving it up to them to do all that. Now users and developers are making their own widgets, their own applications using PayPal.”
PayPal, which has attracted seven million Australian accounts in just four years, is doing what no traditional bank would ever contemplate. It is opening up its software base code to its users and web developers to let them design their own payment products.
“The next 18 months are going to see massive changes and innovations in payments,” says Ranasinghe.
PayPal’s opening up of its code gives every computer geek and web developer the chance to build their own payments products that will compete with the banks.
Already PayPal is the preferred method of paying for ninety per cent of online shoppers. The opening of the PayPal software could potentially crush other online payments systems.
One example of this new revolution in payments technology is Xoom, a remittance service for sending money to other countries. This booming market is driven by hard working immigrants who want to send some of their hard earned wages back home to their families
Traditionally banks and companies like Western Union charge those workers expensive fees and foreign exchange charges to send money offshore.
Xoom and other online remittance services are massively undercutting the banks in this lucrative market.
In just a few short years Xoom has gone from nothing to a billion dollar operation using PayPal software base code.
Other examples of fairly ordinary people using PayPal code to make their own financial products include ‘Invoice2Go’ a mobile phone application for tradespeople and other merchants that allows them to generate an invoice and accept a card payment instantly.
Again this service undercuts bank merchant service fees, giving small business people a cheap and easy way to accept credit card payments out in the field.
It is a development that is truly frightening for the banks - users designing and making their own financial products.
This new development has arisen mainly because one online financial institution – PayPal - realised and admitted that it couldn’t research and predict what the online generation really wanted.
“In the past we tried to define the needs and make the solutions, but we don’t know the whole story,” says PayPal’s Australian managing director Dinuke Ranasinghe.
“We were trying to define the gaps in the market, the inefficiencies, the demand from customers, now we are leaving it up to them to do all that. Now users and developers are making their own widgets, their own applications using PayPal.”
PayPal, which has attracted seven million Australian accounts in just four years, is doing what no traditional bank would ever contemplate. It is opening up its software base code to its users and web developers to let them design their own payment products.
“The next 18 months are going to see massive changes and innovations in payments,” says Ranasinghe.
PayPal’s opening up of its code gives every computer geek and web developer the chance to build their own payments products that will compete with the banks.
Already PayPal is the preferred method of paying for ninety per cent of online shoppers. The opening of the PayPal software could potentially crush other online payments systems.
One example of this new revolution in payments technology is Xoom, a remittance service for sending money to other countries. This booming market is driven by hard working immigrants who want to send some of their hard earned wages back home to their families
Traditionally banks and companies like Western Union charge those workers expensive fees and foreign exchange charges to send money offshore.
Xoom and other online remittance services are massively undercutting the banks in this lucrative market.
In just a few short years Xoom has gone from nothing to a billion dollar operation using PayPal software base code.
Other examples of fairly ordinary people using PayPal code to make their own financial products include ‘Invoice2Go’ a mobile phone application for tradespeople and other merchants that allows them to generate an invoice and accept a card payment instantly.
Again this service undercuts bank merchant service fees, giving small business people a cheap and easy way to accept credit card payments out in the field.
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