How Big of a Threat to PayPal Is Visa?

by Sarah Grotta 0

The Street recently looked at the comparative market strengths of PayPal vs Visa Checkout. Visa has been promoting its secure online payment capability and has been posting some impressive statistics about ease of use and its ability to impact cart abandonment:

Visa Checkout users have a 51% higher conversion rate compared to those who check out the traditional way (i.e., by manually entering a credit card number), while PayPal only has a 28% higher conversion rate compared to those who check out the traditional way. A Millward Brown study commissioned by Visa found that 95% of consumers thought the sign-up process for Checkout was easy and 96% of consumers felt secure making a purchase with Checkout.

More on Visa Checkout’s current stats can be found here.

Visa certainly has more cardholders worldwide than PayPal, but before we start calling for the downfall of PayPal, Visa Checkout has just been launched in a meaningful way and has a long way to go. It has 10 million users in comparison to Pay Pal’s 179 million. Impressive to be sure, but the real test will be if Visa can also bring online merchant to the table.

As this article points out, the likely outcome will be a multitude of options for consumers that includes the four global networks, PayPal and lets not forget Amazon:

First Analysis analyst Larry Berlin thinks that PayPal should be more concerned about Amazon’s checkout solutions, Pay with Amazon, than Visa, explaining that the Amazon brand is so solid that it’s the first thing he thinks of when he goes to buy something online. “Amazon’s the one that worries me,” he said. “Is PayPal holding their own? Yeah. But they’re worried.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

Read the full story here

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