eBay 2012 Annual Report Download - page 47

Some of these competitors have longer operating histories, significantly greater financial, technical, marketing, customer service and other
resources, greater brand recognition, or a larger base of customers than PayPal, and may be also be able to leverage other affiliated businesses
for competitive advantage. PayPal's competitors may be able to innovate and respond to new or emerging technologies and changes in customer
requirements faster and more effectively than PayPal. Some of these competitors may also be subject to less burdensome licensing, anti-money
laundering, counter-
terrorist financing and other regulatory requirements than PayPal, which is subject to additional regulations based on, among
other factors, its licensure as a bank in Luxembourg. They may devote greater resources to the development, promotion, and sale of products and
services than PayPal, and they may offer lower prices. For example, Google previously has offered free payments processing on transactions in
amounts proportionate to certain advertising spending with Google. We also expect new entrants, such as MCX, to offer competitive products
and services. In addition, some merchants provide such services to themselves. Competing services tied to established banks and other financial
institutions may offer greater liquidity and engender greater consumer confidence in the safety and efficacy of their services than PayPal. In
addition, in certain countries, such as Germany, Netherlands and Australia, electronic funds transfer is a leading method of payment for both
online and offline transactions. In the U.K., the Payments Council has announced that mobile payments between bank accounts will be broadly
available beginning in 2014. As in the U.S., established banks and other financial institutions that do not currently offer online payments could
quickly and easily develop such a service.
The principal competitive factors for PayPal include the following:
With respect to our online competition, additional competitive factors include:
Some of PayPal's competitors, such as Wells Fargo, First Data, American Express and Royal Bank of Scotland, also provide processing or
foreign exchange services to PayPal. If PayPal were to seek to expand the financial products that it offers, either alone or through a commercial
alliance or an acquisition, these processing and foreign exchange relationships could be negatively affected, or these competitors and other
processors could make it more difficult for PayPal to deliver its services.
GSI
Our GSI business segment has two main businesses: ecommerce services and interactive marketing services.
Ecommerce Services
The market for the development and operation of ecommerce services that enable companies to operate ecommerce businesses and integrate
their ecommerce businesses into their multichannel retail offerings is continuously evolving and intensely competitive. In our ecommerce
services business, we face competition from in-house ecommerce solutions, technology and service providers which supply one or more
components of an ecommerce solution, and other providers of integrated ecommerce solutions. Many of our prospective ecommerce services
clients evaluate managing all or some aspects of
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payment services targeting users of social networks and online gaming, including PlaySpan (owned by Visa), Boku and Bango;
• payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank
account, including ZashPay from Fiserv and Popmoney from CashEdge (recently acquired by Fiserv), both of which have announced
collaboration agreements with Visa; and
• online shopping services that provide special offers linked to a specific payment provider, such as Visa's RightCliq, MasterCard
MarketPlace, TrialPay and Tapjoy.
•
ability to attract, retain and engage both buyers and sellers with relatively low marketing expense;
•
ability to show that sellers will achieve incremental sales by offering PayPal;
•
security of transactions and the ability for buyers to use PayPal without sharing their financial information with the seller;
•
low fees and simplicity of fee structure;
•
ability to develop services across multiple commerce channels, including mobile payments and payments at the physical point of sale;
•
trust in PayPal's dispute resolution and buyer and seller protection programs;
•
customer service; and
•
brand recognition.
• website and mobile application onboarding, ease-of-
use and accessibility;
•
system reliability;
•
data security; and
•
quality of developer tools such as our Application Programming Interfaces and Software Development Kits.