Paypal Ms Case in Harvard Business Review

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PayPal Merchant Services: Harvard Case

Services Marketing

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• Founded in December 1998, PayPal is a leading global online payment company.

• Purchased by eBay in October 2002.

• Over 100 million registered accounts globally and available in 55 markets.

• PayPal has a local presence in 13 countries outside the US, including UK, Canada, Australia, Austria, Belgium,France, Germany, Italy, Spain, Ireland, Netherlands,Switzerland and China.

• Supports payments in U.S. Dollars, Canadian Dollars,Australian Dollars, Euros, Pounds Sterling,Chinese Yuan

• Regulated by the FSA.

• Passported License to 25 EU countries.

• Becoming a major player in the Merchant (off-eBay) space.

• Our cross border product is unique and dramatically growing in usage.

• PayPal has received over 20 awards for excellence from the technology industry.

PayPal Value Proposition

Safe and secure

• Your financial information is never shared

• The best encryption technology available

• Fraud rates are best in class against reputable benchmarks

• Buyer and Seller Protection, free of charge


• PayPal payments are instant – fast checkout and payment

means buyers get their items quicker Easy

• Convenient

• Sign up and start using in a few minutes

• Keep track of transactions by going to your online account

• Sellers can accept it both on eBay and their own websites

Issues in the Harvard Case : PayPal Merchant Services

Q1 : Should they accelerate investments in merchant services’ efforts ? How would credit card companies react if PayPal pushed more aggressively for Off eBay business?

Yes,PayPal should accelerate in Merchant Services(off ebay ) because the sector is growing.With more and more people coming on to cyberspace and earning money through transactions,ads,consulting.eBay is just restricted to transaction(sale) and not other money management online.

PayPal has an immense opportunity in investing in off-eBay merchant services.

Customer preferences have changed over the years. Bill Payment, Online banking, Google Ads, online funds transfer are the new keywords.People use PayPal for managing their money online in a secure and trusted way.Rather than just buying and selling on eBay,people are involved a lot in earning revenue over the net.

So PayPal is a perfect brand in that domain so PayPal should keep investing aggressively in this new market.

Credit Card Companies Reaction

Credit Cards companies would have no choice but to tie up with PayPal or similar services. Credit Card Frauds and security are big issues. Many people avoid using credit card online suspecting phishing activities. So Companies like MasterCard/VISA can tie up with paypal and offer services to its customers.

Q2: How should investments be allocated to promoting growth on the two sides of PayPal’s network.i.e. Consumers vs Merchants?

Any business can be classified on the basis of

1) B2B

2) B2C

Paypal also has these two aspects in the online Consumer world.

Paypal is open for normal netizen and also offers services to corporates who transact online.

Both of the customers are equally important for PayPal.

When we see google,it has earned its major revenue through Adsense program(90%).This could be achieved through proper management of both types of customers.

Paypal also need to follow a similar model.

From small time bloggers earning revenue through Ads to big corporates, Services should be provided accordingly.

In the business of Online Money management Service, Trust is of paramount importance.

Regarding the allocation both the customers are equally important,so nearly equal budgets should be allocated.

If small customer bring less revenue, their number is large so it becomes equal to the Big Customers.

The investments should be per customer, with every customer getting equal importance, as both bring value...
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