Ahh PayPal, both a handy way to shift money around and a perpetual thorn in the side. Anyone who has used the service at any great length will no doubt have a story about the, shall we say, “quirks” that exist within the ubiquitous payment system. Be it the odd way it deals with multiple currencies, or the seemingly random restrictions on certain types of payment, PayPal is equally appreciated and reviled the world over.
One thing everybody can agree on is that the eBay-owned service has pretty much had the market to itself up until now. Boasting 237 million accounts worldwide, PayPal is the de facto standard in peer-to-peer transactions.
Now real-world financial institutions Visa and American Express have decided they want a piece of the action, and have both announced their own PayPal clones within a few weeks of one another. Both of these new competitors will have distinct advantages and disadvantages – both will benefit from their parents companies’ huge established userbase, but both will suffer from being tied to that same companies’ ecosystem. PayPal is, of course, agnostic, accepting card payments from any and all comers.
Visa have not yet released huge amounts of details about their service, whereas American Express have been slightly more forthcoming. Their new platform, called Serve, will work in much the same way as PayPal – customers can load, receive, send and withdraw money from their Serve account via cards and bank accounts. The service can also be used to complete transactions with sellers that accept American Express using a reloadable Serve card, similar to the Chargecards offered by the company for tourists.
Serve accounts can be managed via the Web, mobile apps (The Android app is already live) and Facebook, and AmEx are waiving most usage fees for the first six months as an incentive to get people to switch from PayPal.
We can see there services being pretty powerful tools in the not-so-distant future, especially when combined with Google Inc.’s rumoured NFC Android payment system – and if these two new systems can offer a cheap service without PayPal’s foibles, they might just have a chance.
