Yesterday I listened to a talk from PayPal at one of Europe’s largest online innovation and developer conferences, LeWeb. The company was incredibly bullish about the online ecommerce market and explained that its business was now not only derived from online
retailers and merchants but also offline, brick and mortar organisations that are seeking to profit from the increasing amount of money being spent online. According to PayPal, $1bn of transactions will go through its developer platform PayPal X in 2010.
As online payments gather momentum and PayPal spreads its reach, financial institutions are starting to take this seriously as a threat but do not yet know how to prevent PayPal’s seemingly unstoppable capture of the online payments world. There is a valuable
revenue stream to be capitalised on by facilitating open access to developers to the mainstream payments networks such as Visa and MasterCard, to encourage more innovative uses and tailored payments experiences.
In 2011, I expect to see many more partnerships between financial institutions and payment platform developers to bring new payment services to market.