Banks, telcos, and e-commerce players in the region now offer their own payment platforms, but PayPal believes its global reach and security infrastructure will ensure its market relevance.
Amid the rise of e-wallets and mobile payment platforms in Asia-Pacific, PayPal is betting on its global reach and security infrastructure to keep its digital payments service relevant.
The region's online payments and e-commerce markets had seen significant progress in the last couple of years, fuelled largely by an active consumer ecosystem and various government efforts to digitise the payments industry, said PayPal CTO Sri Shivananda, in an interview with ZDNet.
There also had been much innovation in the industry, he said, with both local and global players offering payment services touted to deliver improved customer experience.
In fact, various companies now offered their own e-wallets and mobile payment services including telcos such as Singtel's Dash, banks such as DBS's PayLah, e-commerce sites such as Alibaba's AliPay, messaging platforms such as Tencent's WeChat Pay, and ride-sharing operators such as Grab's GrabPay.
With these companies stepping up to close the payment loop, was there still room then for PayPal to play a role?
Shivananda believed so, pointing to the vendor's focus on security and expansive reach as competitive advantages. It also ensured user experience was seamless, he said.
This meant building a platform that not only provided security and trust, but also a more convenient way of paying for online transactions, he said. For instance, it would be cumbersome to repeatedly enter 16-number credit card details on small mobile screens to make purchases across several platforms, he said. PayPal users only needed to log into their account once and be able to transact with any of 18 million merchants that supported PayPal's platform worldwide.
And if they had to change their payment credentials, they only needed to do so in one place--via PayPal--rather than across different e-payment platforms, he said.
"And would you want to carry 15 different wallets to shop at 15 different merchants?" he quipped. "It's not the most convenient or secured thing for consumers to do. So, sure, there are lot of people trying to get into [the] payments [industry]...but it's not easy to sustain in the long term."
He added that merchants that integrated their systems with PayPal had a conversion rate of 88 percent, compared to the nearest competition which conversion rate was 40 percent. This meant that 88 percent of online shoppers ended up checking out with their carts and completing the transaction with PayPal.
In addition, merchants that supported the payment platform would have access to consumers in the 203 global markets it served, he said, pointing again to PayPal's relevance in a region that now was peppered with various e-payment options.
Last year, PayPal processed USD$451 billion worth of transactions globally and an average of 34.7 payment transactions per account. It served 220 million active customers across 203 markets, supporting 100 currencies. In the first quarter of 2018 alone, it processed US$132 billion payment transactions.
Asked about its Asia-Pacific footprint, Shivananda said the company did not break down its user or transaction numbers by region, but noted that 52 percent of PayPal's business came from outside the US.
According to payment services vendor Worldpay, online payments increasingly were taking market share from traditional platforms such as credit and debit cards. In China, for instance, e-wallets last year accounted for 62 percent of overall payments, with most consumers opting to use digital platform such as Alipay, Tenpay, and WeChat Pay.
In Singapore, bank transfers and e-wallets were projected to grow to 21 percent by 2021.