Chinks in PayPal’s Marketshare
While PayPal continues to march ahead with all sorts of payments initiatives and innovations, there seems to be some deterioration in the marketshare it enjoys in some of its core services.
Yesterday, EveryPlaceISell.com released a study that found 22% of those eBay merchants who had accepted PayPal in October 2010 a year later had stopped doing so. Conversely, 19% of eBay merchants added credit cards to their sites during that time.
EveryPlaceISell.com founder David Steiner said, “What we saw was that 22% of those merchants actively removed PayPal as a payment choice from their off-eBay stores, while nearly 20% more merchants began accepting credit cards. The cost of merchant credit card accounts has decreased substantially over the past several years, making it much more affordable for online retailers to offer it as a payment option.”
Similarly, Bank Innovation has have found evidence of some decline in PayPal usage among consumers. According to our Bank Innovation Monitor data, 58% of consumers told us that they had used PayPal within the last three months, as of the third quarter. That percentage was 60% in the first quarter of 2011 — not a tremendous decline by the third quarter, but noteworthy nonetheless. It should be noted that usage for payments of Visa, American Express, and bank debit cards all increased by the third quarter compared to the third quarter. (Discover Card and MasterCard also saw slight decreases in usage during this time period.)
No need to pull the fire alarm at PayPal just yet, but the downward trend deserves notice.
