Case Study: 3 Ways PayPal Differentiated Itself to Take Over E-Commerce

Elon Musk, founder and CEO of Tesla Motors and SpaceX, is no idiot. The guy knows how to identify a need and implement the proper engineering principles to design user-friendly, progressive products and businesses. He was one of a select few who merged together to create PayPal, which was one of the first real online payment systems people could trust.

Although PayPal has fallen behind in the recent past in terms of new technologies and payment systems, they still continue to provide the “status quo” in service and protection. In fact, much of the technology and business techniques used when the payment system was created are still in practice today.

3 Differentiators PayPal Provides

Customer Service – If you type any PayPal question into Google, there are usually two pages of nothing but customer service answers to questions you may have, including an online help-desk chat and information forum. However, what attracts consumers to store money on PayPal is the customer service available. Located on every page within the system or on google searches, PayPal provides real-time, live customer service help from a knowledgeable staff around the world, 24/7. Therefore, you are able to solve a problem quickly and on your time. The convenience factor and the peace-of-mind offered allow clients to sleep well at night knowing that PayPal is legitimate and safe. When dealing with money, these two factors are paramount for sustainable business practices.

Consumer Protection – For both buyers and sellers on e-commerce platforms, transactions can sometimes be scary endeavors, especially if you do not know where your money is going and who is shipping your products. The consumer protection shields buyers from fraudulent situations when foul play is involved and offers assurance in product quality – otherwise you are entitled to a refund or compensation. With the rise of e-commerce, we also see a rise of scammers looking to make a quick buck. Unfortunately, not all scammers can be caught and reprimanded, but PayPal does act as a great barrier for buyer and seller relationships to develop and transaction to occur. In addition, the consumer protection also protects the seller from fraudulent use of the guarantee by the buyer through disclaimer information, product description and condition forms, and primary shipping addresses. If the seller follows PayPal directions and protocol precisely, then he or she is protected as well from fraudulent activity. As a result, PayPal continues to foster online transaction growth and move the e-commerce industry forward.

Multiple Money Options – PayPal has always distinguished itself as more than just a payment system within the e-commerce industry. Rather PayPal has taken an identity of its own with electronic banking. Unlike some other banks, there are no holding costs with PayPal and no fees for storing your money, even with just a few bucks in your account. Sure there are transaction costs, but unlike some banks that require minimum balances, PayPal allows for any balance anytime throughout the year. In addition, you can send money as gifts, buy products virtually anywhere on the web (given the current integration of their services), and even apply for credit cards or hold a debit card with available funds. PayPal acts less like an online payment system and more like a virtual bank for all of your needs – recently they have begun to integrate services with major players to make PayPal the place to store money. As online payments continue to become the norm and money efficiency grows, PayPal will continue to integrate with other third-party companies involved with most people’s daily lives – activities within industries like insurance payments, banks loan payments, car loan payments, etc.

The writer, Matthew Hall, is an experienced entrepreneur in the realm of ecommerce. After selling off his last business he is in a mini-retirement, writing primarily to keep himself busy and up-to-date on the latest trends. One of the companies he has found incredibly reliable for facilitating an excellent online storefront and checkout procss can be located at, and it's one he most highly recommends. You can learn more about Matthew by visiting him on Google+.

Powered by Blogger.