SWOT Analysis of PayPal – Paypal SWOT Analysis [Explained]

PayPal is one of the Largest Fortune 500 Companies. PayPal Holdings, Inc is one of the leading online payment systems. Paypal is owned by eBay till September 2014. Paypal is now a separate public limited company from eBay. Paypal is acknowledged for its safe payment services and good money transfers. Many digital services accept payment through PayPal. Paypal is the biggest online payment system in the world. Head Quarter of Paypal is located in California. Elon Musk is the Co-Founder of PayPal Payment System. He is famous for investing his income from PayPal into SpaceX.

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Strengths in the SWOT analysis of PayPal – Paypal SWOT Analysis

  • Worldwide Presence: PayPal has an established presence in more than 202 countries. Paypal is a very popular payment gateway that offers the most secured payments.
  • Acquisition by E-Bay: PayPal was acquired by eBay in July 2002, for $1.5 billion. eBay has helped PayPal to improve its system and develop strong technology. Paypal was spin-off as a separate entity from eBay in the year 2014.
  • Acquisition of Various companies by Paypal: Paypal has acquired many companies some of them are Fraud Sciences, Bill Me Later, Fig Card, Zong, Card.io, IronPearl, Braintree, Venmo, StackMob, Paydiant, CyActive, Xoom Corporation, Modest Inci, and TIO Networks, etc. Paypal also has an undisclosed 70% stake in GoPay.
  • WideRange of Service Options: There are multiple services of PayPal such as PayPal here, digital goods selling options, online invoicing, PayFlow Payment gateway, virtual terminal, BillmeLater. These features help to increase merchants and consumers.
  • Huge Customer Base: Paypal is always known for its large user base or a total number of customers. Paypal is able to deal with around 25 different currencies. PayPal is a widely accepted and trusted brand name to both customers and merchants. The number of active PayPal users is over 192 million.
  • Use: PayPal is easy to use by both customers and merchants. Setting up Paypal Payment Gateway is easier as compared to other payment gateways.
  • Its Large Employee Base: Paypal has an employee base of 23200. Paypal is spending a lot of money and resources on the training of employees.
  • Increasing Stock Prices: Due to the increase in the online payment system, Paypal Share prices are also reaching great heights.
  • Paypal Earnings: Paypal Net Income for the year 2019 was US$17.772 billion. The total Assets of Paypal is US$51.333 billion.
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Weaknesses in the SWOT analysis of PayPal – Paypal SWOT Analysis

  • High connection with frauds: A payment system requires very strong technical support and protection because of frauds. There have been various phishing attacks that ruined consumer’s confidence in the system.
  • Transaction Charges are High: PayPal charges high fees for transactions, international cards, Cash backs, and card authorization. This can lead to unhappy users and therefore is a weakness.
  • User Complaints: Complaints were made about the freezing and termination of PayPal accounts without question, PayPal’s brand image has been affected.
  • Needs Internet Connectivity: PayPal requires internet connectivity as well as digital literacy. This will limit the growth of emerging and lesser developed countries.

Opportunities in the SWOT analysis of PayPal – Paypal SWOT Analysis

  • India as the Biggest Opportunities: India is moving towards cashless or less cash economies and thus PayPal has an opportunity to expand its market in India.
  • Increasing Use of Internet and E-commerce Platforms: With the increasing usage of the Internet and technology advancement, digital currency is becoming very popular among people. Due to increase in the internet usage, there is an increase in usage of eCommerce platforms. Paypal can target these E-commerce Platforms to use their services.
  • PayPal can tie-up with various B2C businesses as it provides different options of payments.

Threats in the SWOT analysis of PayPal – Paypal SWOT Analysis

  • In such countries as China, Japan, and Taiwan, there are strict economic policies that constraints itself to set up.
  • PayPal faces global competition from Google Pay, and local competitors such as Phone Pe, Paytm, Bhim, Bharat Pay, etc.
  • PayPal faces a high threat of hackers and fraud and this issue is a serious security vulnerability in its system.
  • With banking services like Netbanking and IMPS (immediate funds transfer), PayPal will be mostly non-viable in the future. In addition, there are other intermediaries that allow transactions between banks and customers. As a result, Paypal and others find they have little business.

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