Andrea's PayPal input

What explains PayPal’s early success?
The payment method for Paypal was very attractive to consumers and auction sellers. For consumers they could choose the funding source from credit card, bank or Paypal account. Recipients of the funds had an option of where they could transfer their funds. For sellers they didn’t have to have a credit card, which was appealing to those who didn’t have credit history or couldn’t pay the fixed fees. Sellers could also send out the sold product without having to wait in the mail for the payment. It was a fast and efficient payment method.
Paypal’s marketing campaign brought in many new users due to the attractive award given as well as to existing members who referred.
Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?
I definitely think Google is a threat to PayPal because of its long existing brand awareness and high market search share. Since they already have a huge user base and are very credible existing users will easily accept their new payment offering. If users are already happy with Google’s service and perceive it as being secure they will most likely use it.
Google has found a way a unique business model to offer users and merchants added value. For users it is a type of 1-way shopping. After searching they don’t have to leave Google’s site to purchase. This business model also opens opportunity for sellers who don’t have a website. Google also uses its existing strengths for instance by matching knowing which keywords generate leads for an advertiser to how search drives sales. They could now offer advertisers more advice on ways to increase sells.
A reason they would be competing with PayPal is that through Base consumers don’t have to go to the marketer’s site where the payment may be done through PayPal. This would take away PayPal’s business when the consumer purchased through Base.
For Google I think its existing payment method with Base would work but they could also add it a payment method on the merchant’s site. But since Eric Schmidt stated they aren’t competing with PayPal this would go against what he said.
For ebay/PayPal to defend against Google they need to come up with an innovative service different from any others or be the best in the online payment industry. They need to have attractive prices to merchants and provide a very secure site. I believe PayPal is already currently doing the things I mentioned, therefore if they keep this outstanding service they should succeed.