Contents

1. Introduction 0

2. Market Analysis 0

3. Internal Analysis 1

3.1. SWOT Analysis 1

Strengths 1

Weaknesses 1

Opportunities 1

Threats 2

4. External Analysis 2

4.1. PESTLE Analysis 2

4.1.1. Political 2

4.1.2. Economic 2

4.1.3. Social 2

4.1.4. Technology 3

4.1.5. Legal 3

4.1.6. Environmental 3

4.2. Porter’s Analysis 4

4.2.1. Bargaining Power of Suppliers 4

4.2.2. Bargaining Power of Buyers 4

4.2.3. Threat of Substitutes 5

4.2.4. Threat of New Entrants 5

4.2.5. Competitive Rivalry 6

5. Environmental Analysis 6

6. Conclusion 7

6.1. Recommendations 7

References 8
1. Introduction
PayPal, headquartered in California, USA, is a global leader in online payment processing.
Originally launched in 1998 under the name Confinity, the corporation changed its name to
X.com and then settled on PayPal in 2002 (Trautman, 2015)(X). The corporation has been at
the forefront of the digital payments revolution, democratizing access to banking and
fuelling the expansion of online shopping (Hillberry, 2020)(X). The organization has
allowed previously unreachable markets to join the global market (X). The organization
functions as a global marketplace connecting buyers and sellers in over 200 countries
(Hillberry, 2020) (X).

By the year 2020 it will have processed over $1 trillion in payments and boast 392 million
active accounts (Ristivojevic, 2021)(X). The organization values its employees and promotes
an environment that is welcoming of all backgrounds. The 27,000 employees make up a
thriving culture that actively seeks to assist the community (Casado-Aranda, 2018).

However, with the attention of customers shifting to the growing mobile channel, PayPal,
which dominated the e-commerce narrative a decade ago, is now trying to remain
relevant (Ristivojevic, 2021)(X). Today, PayPal is the more established incumbent in the
payment market, but it is seeing greater competition from newer, more innovative
companies(X). There are a plethora of new companies in the payments industry today, each
of which is trying to solve a specific problem while also taking a bite out of the payment
transaction fees earned by industry giants like PayPal (Fota, 2022)(X).

The report reflects on the strategic management of the PayPal by reflecting on the internal
and external tools. This allows the researcher to have a better grip on the marketing
strategies adopted by the company.

2. Market Analysis
Users of PayPal tend to be technologically aware individuals looking for digital media or a
global electronic platform to send and receive money. To help businesses with licensing,
billing, and rapid access finance, it offers a whole stack of services (권연아, 2020)(X).
Customers should have no trouble using technology and faith in digital currency exchange
because PayPal is an online and unique platform, and most company transactions are made
on electric devices like phones and tablets (Assimakopoulos, 2018).
The data above suggests that the primary target market consists of middle-class and higher
income adults aged 18-55 in the United States(X). People that love and make frequent use of
highly sophisticated technological systems are PayPal's primary audience and present users.

3. Internal Analysis
3.1.SWOT
Analysis
Strengths
More than 230 million customers worldwide appreciate PayPal's safety and security as one of
the best online payment methods available(X). Since the firm processes payments for more
than 230-million-member accounts in 26 currencies across more than 200 countries, it has
invested heavily in a secure and protected infrastructure(X). PayPal offers many features,
such as PayPal here, Shop Outside the Box, a virtual terminal, and more.

Many different types of buyers and businessmen have been drawn to this. PayPal is often
regarded as a trustworthy organization due to its strict adherence to anti-phishing
procedures(X). PayPal is convenient because it requires no paperwork to create an account.

Weaknesses
PayPal is still vulnerable to a plethora of website-related threats because of the persistence of
widespread payment fraud and hazards associated with online payments. Potential customers
may be put off by PayPal's hefty processing costs(X). Meanwhile, being online and able to
use digital tools are necessities for PayPal users. All these obstacles are now stymying
economic development in developing nations and undeveloped regions. And because
some consumers in developing countries are still wary of making purchases online, PayPal
is not widely accepted there (Aziri, 2020).

Opportunities
Countries still in development, such as India and China, are pushing for cashless or reduced
cash transactions (X), which presents huge prospects for online payment systems like PayPal.
Further, the Internet's widespread use, increased interoperability, and widespread adoption of
digital literacy are all contributing to the further growth and development of payment systems
like PayPal and the widespread adoption of digital currency(X). In addition, many B2C
services can be combined or utilized singly to reach a wider audience.
Threats
PayPal's availability is restricted in nations with tight economic policies, such as China,
Japan, and Taiwan(X). Meanwhile, PayPal faces stiff competition from a variety of
well-known international systems, including Apple Pay, Google Wallet, WePay, Alipay, and
others at the national and regional levels(X). When considering PayPal's and the industry's
size, the risks of hacking and fraud become enormous. Online banking and IMPS (rapid fund
transfer) are two examples of services that are displacing PayPal(X). Individuals can also
reselect different middlemen to engage in direct banking transactions (Shaikh, 2018).

4. External Analysis
4.1.PESTLE Analysis
4.1.1. Political
PayPal Holdings, Inc., which operates in Credit Services in more than a dozen countries,
faces a variety of political environment and political system concerns. To succeed in the
ever-changing Credit Services industry across global markets, it is necessary to spread out
the systemic risks associated with the political climate in those markets(X). Before entering
or investing in a new market, PayPal Holdings, Inc. can take a hard look at the following
factors:

The country's government is stable, and the Credit Services industry plays a significant role
in the economy.

● Invasion by force: a possible risk

● Regulation in the financial sector and the prevalence of corruption in that industry.

4.1.2. Economic
The growth rate, inflation rate, and other economic indicators that are specific to a country
are all useful resources for PayPal Holdings, Inc. Organizational success can be traced back
to the level of economic growth in a country. Opportunities for PayPal to expand are vast
in developing economies.

4.1.3. Social
A company's culture is affected by the norms and customs of the society in which it operates.
Marketers at PayPal Holdings, Inc., who are tasked with understanding the customers of the
Credit Services industry, will do so in large part by considering the common views and
attitudes of the community at large. PayPal Holdings, Inc.'s top management should conduct
a PESTEL analysis taking into account the following social factors:

● Human resources and demographics

● The social stratification of classes and the distribution of authority and resources.
● The typical and average levels of education among PayPal Holdings, Inc.'s workforce

4.1.4. Technology
● Competition for PayPal Holdings, Inc. has been bolstered by new technical
breakthroughs.
● Impact of Technology on Product Availability regarding online payments that has
direct competition with Paypal.
● Rate of technology diffusion Impact on the value chain structure of the financial
sector Impact on the cost structure of the Credit Services industry can directly impact
Paypal

4.1.5. Legal
There are several issues PayPal encounter where an organization's intellectual property
rights are not adequately protected by the law and the corresponding authorities. Due to the
risk of having trade secrets and other proprietary information stolen, companies should think
twice before joining such markets. When expanding into a new market, PayPal Holdings,
Inc.'s top executives should think about the legal implications of several potential decisions,
including the following:

● Internet sales and consumer safety

● Labor legislation

4.1.6. Environmental
Paypal should carefully consider the environmental criteria that are necessary to operate in
new markets before entering them or launching a new operation in existing areas. A few
examples of environmental variables that a business should think about in advance include -

● Increasing public interest in environmental protection can be a great opportunity for

PayPal.
● There is a rising awareness of sustainability throughout the e-payment business which
can enhance brand image of PayPal.
 4.2.Porter’s Analysis
4.2.1. Bargaining Power of Suppliers
The banks and companies that operate global financial networks are PayPal's providersX).
Due to the universal availability of the internet, all businesses have the same leverage when
negotiating with suppliers(X). As a result, businesses tend to make purchases of standardized
goods in order to lessen the impact of competition. When a product or service is
standardized, providers are unable to charge exorbitant pricing since there are so many
competitors offering the same thing(X). The banks that supply the various e-wallet services
are in a cutthroat
competition to offer the best rates and service to their customers(X). As a result, PayPal can
pick from a wide variety of vendors to work with. (Akroush, 2010).

(Reference for diagramX)

4.2.2. Bargaining Power of Buyers

Customers' bargaining power, or their ability to exert pressure on the firm, influences both
their price sensitivity and the corporation's ability to set prices(X). Customers' willingness to
transfer providers has decreased thanks to the proliferation of low-cost alternatives made
possible by the widespread adoption of internet technologies(X). PayPal's fees are higher than
those of its rivals, but the company has shown little sign of reducing them.
The reason for this is that PayPal offers superior services to its clients compared to its
competitors. For example, PayPal allows its customers to store up to 19 different national
currencies in their accounts(X). It has substantial fixed expenses to keep providing these
services because it is the only company that permits users to hold that many currencies.

4.2.3. Threat of Substitutes

The expansion of internet-based methods has increased the threat of substitution across a
wide range of businesses in recent years(X). Credit cards, debit cards, cheques, money orders,
and online banking are just a few of the many payment methods accepted in the booming
e-commerce sector(X). Consumers prefer these more conventional ways to online payment
services like PayPal when conducting business on a local level(X). A credit card shopper's
only out-of-pocket costs are the card's purchase price and any applicable interest fees
assessed by the issuing financial institution.

However, he can avoid paying interest and save money by paying the bank instead of using
PayPal if he pays the whole amount due before the due date. Online banking makes it
possible for people who do not have credit cards to make payments(X); all they need is a
checking or savings account at the appropriate financial institution.

Additionally, many PayPal users have complained that the company has frozen their
accounts without any explanation(X). This is why having a bank savings account is
preferable to having a PayPal account. Since PayPal is not subject to the same banking
regulations as traditional banks, it can quickly freeze its users' accounts without warning.
This means that PayPal has a greater risk that its customers would abandon the service in
favour of a
competitor.

4.2.4. Threat of New Entrants

Competitive pressure from new entrants is expected to be relatively high in the digital
payments processing sector(X).

When PayPal first launched, there weren't as many online payment options as possible
available, thus the company naturally had a larger part of the market. Internet application
development has become increasingly user-friendly and accessible as internet
infrastructure and infrastructure has improved over time.

Wirecard, in contrast to PayPal, is obligated to provide its users with advance notice
before suspending or restricting their accounts. Consumers might file a lawsuit over it. To
avoid
losing consumers, PayPal should stop thinking primarily about preserving its interests and
start thinking primarily about safeguarding the interests of its users.

4.2.5. Competitive Rivalry

Because of its unique business model as a "Financial cum Technology Company,"
PayPal faces a unique set of challenges compared to more traditional financial
institutions.

PayPal entered the market as a challenger to incumbent firms, and it did so by using the
technology at its disposal to its fullest extent. When it comes to competition, the industry is
characterized as oligopolisticX), with only a handful of significant service providers
dominating the market. Visa, Mastercard, and American Express are its main rivals

As internet technology improves over time, it becomes harder to differentiate between rivals
as their offers grow harder to keep secret. As a result, PayPal employed an alliance
approach to increase its market share relative to its rivalsX).

PayPal has also ratcheted its competitive pressure on other mobile payment service providers.
Obopay was established in 2005 and is a U.S.-based provider of mobile payment servicesX).
You can use this service to send money to another person using only their mobile phone
number.

5. Environmental Analysis
Regarding the newest developments in online payment systems, PayPal is always in the thick
of things. The leader in electronic commerce is expanding into new areas, such as mobile
and in-store payments. From its ubiquitous web platform to its plug-in devices that enable
first-time card payments to the relatively new beacon technology, with the potential to
revolutionize the entire consumer shopping experience, PayPal competes in practically every
area of payments.

PayPal's current offers are extensive and diverse, and it's hard to think of another payment
processing company that can match that. PayPal has a product that can compete with any of
the new payment choices that have recently emerged on the market.

The improving standard of living of local people in emerging countries presents an

excellent chance for growth over the next three to five years as economies in these nations
continue to improve. Merchants, the lifeblood of PayPal's business economy in a thriving
retail setting,
can serve as the company's entrance point into the markets of emerging countries
(Wrongly referenced!Kasongo).

The consolidation of the e-commerce business in recent years, however, has increased the
level of competition. By increasing their marketing efforts, PayPal can help businesses
learn more about and connect with potential consumers and let PayPal users know that they
may use the service to make purchases without spending any money.

Facilitate checkout, improve the shopping experience for SMEs, and boost their revenues to
boost PayPal's growth. PayPal must refine its client segmentation strategy to succeed in
emerging regions like India, Russia, Turkey, and Africa. To accomplish their marketing aims,
these consumers use various tools, products, and services.

6. Conclusion
Developing a seamless payment system for in-store purchases is a major focus for PayPalX.
For consumers who are on the fence about making payments through these new channels,
PayPal hopes this experience will be a deciding factor. When promoting its wares and
offerings, PayPal focuses mainly on the digital sphere. PayPal streamlines the payment
process for online merchants by educating potential customers about how PayPal may help
them, and their businesses growX.

PayPal is a time-saver for their online marketing-school clients. Having a service like PayPal
is invaluable. However, PayPal may choose to run ads that explain how to use the Internet
and PayPal securely due to the numerous security dangers associated with doing business
online.X Promotion of PayPal in this way can win over consumers because of the positive
impact it will have on the community. This has drastically altered the media landscape,
allowing PayPal to expand its use of new media in advertising by including platforms like
Twitter and Facebook (Akroush, 2010).

6.1. Recommendations
PayPal must be tweaked so that it can handle the increased fees. Customers are more likely to
make repeat purchases with PayPal if the service is convenient and affordableX. Customers
are more likely to combine their purchases thanks to the loyalty program, which provides
businesses with more information for market researchX. Therefore, PayPal should work on
creating a robust loyalty program to enhance stickiness.
Get people to do all their money dealings on the PayPal site. Strategically, PayPal should
strive to lower the amount of money it spends on cash back and rewards in favor of more
nebulous subsidies and relationships with retailers who can offer customers discountsX. More
shoppers are turning to PayPal.

References
Assimakopoulos, C. P. (2018). Service quality of online transactions: the PayPal case.

Casado-Aranda, L. A.-C.-F. (2018). A neuropsychological study on how consumers process

risky and secure E-payments. . Journal of Interactive Marketing, 151-164.

Kasongo, J. B. (n.d.). The Use of a Blue Ocean Marketing Strategy For Market Capture in
the US: A Case Study of the Blujade Company. SSRN.

Shaikh, A. A. (2018). Marketing and mobile financial services: a global perspective on

digital banking consumer behaviour. Routledge.