1. What is the value proposition that PayPal offers consumers? How about merchants?
The value proposition it offers is that your money can be received via e-mail quickly without paying a big commission as it is with credit cards and with certainty that this is transferred by a large institution for the when the merchant receives the notification via mail and money already in your account that can transfer money to another account, and if necessary transfer to the account of another person, one of the advantages that this system has besides being very fast, this operation is less heavy and you do not have to be waiting to get money because, as is the case of check and credit cards money sometimes delayed, another advantage is that here you do not restrict the use of debit card because in many cases only let you use debit, otherwise the leave use credit cards to purchase items over the internet is more expensive for sellers that the able to use PayPal.
On the otherwise on the side of consumers as already mentioned is more convenient and cheaper for them to use PayPal because cost is a little cheaper than using your credit card because consumers do not pay for the use direct from your account the only way in which it is charged to transfer money to foreign accounts, currency exchange or new financial products.
So for these reasons both the merchant and the consumer are benefiting because both are spared most of the money they make transfers via credit card and more safely and quickly and that within that can make transfers, payments and shopping via the Internet without giving the credit card number to prevent fraud so that customers can feel more secure and does not charge if the purchase is authorized. Therefore the consumers have more benefits knowing that their cards can not be cloned or fraud may occur through merchants.
2. What are some of the risks of using PayPal when compared to credit cards and debit cards?
One of the great
References: 1. Case Study 5-70 paragraph 3 Kent C. Laudon E-Commerce 2009 “PayPal has Company” Page 5-67 – 5-71