![]() ![]() ![]() Nonetheless, since the feature is invite-only for now, its impact on PayPal's future revenues would be minimal momentarily. In contrast, Amazon reported approximately $143.52B of revenue in North America for the retail segment, assuming a flat 60% net sales mix for the region. Nonetheless, given that PayPal is often an individualized account, the scale of its global membership numbers would not be a fair comparison to Amazon, given that the latter allows Prime to be shared among the household.įor FY2021, PayPal reported $13.71B of revenues in the US, accounting for 54% of its global sales then. That might be a blow for PayPal, given that 89% of Americans were estimated to use the payment gateway for online shopping in 2021. In addition, since the 'Buy with Prime' feature is expected to be launched in the US ( for now ), we expect PayPal to lose some of its market share in the region, given that there are 148.6M Prime members in the US as of FY2021. Why does this matter? Given Amazon's push for 'Buy with Prime,' we expect more Prime members to use the frictionless payment system, compared to PayPal's externalized platform. If we were to compare their users, PayPal obviously edged out Amazon Prime members with 426M active global users by FY2021, while the latter reported over 200M global Prime members. Seeking Alpha itself offers an option to pay its global writers through PayPal, amongst others. ![]() Besides the usual retail payment gateway, PayPal ( and Venmo ) is also popular for those seeking to receive salaries from global companies, payments from US insurance companies, and tax refunds from the US government. In the meantime, PayPal has been more aggressive in its expansion and operates in over 200 countries with 25 currencies. Though Amazon does not break down its revenues for its Amazon Pay, we believe it would have contributed a decent sum, seeing that the company is eyeing a bigger pie in the payment gateway market through the 'Buy with Prime' feature. Though similar in terms of transactional fees, Amazon Pay is still limited to merchants in 18 countries, though consumers are largely able to use the service globally with 12 supported currencies. In contrast, PayPal's processing rates are in the range of 1.9% to 3.5%, with a fixed fee ranging from $0.05 cents to $0.49. ![]() Based on its website, Amazon Pay charges a 2.9% domestic processing fee and a $0.30 authorization fee for web and mobile-based transactions, while charging 3.9% for international transactions. With Amazon Encroaching The Online Payment Space, Will PayPal's Growth Suffer?Īmazon Pay is not new, since the digital wallet was introduced by the company back in 2007. While we anticipate that PayPal Holdings ( NASDAQ: PYPL)'s Venmo digital wallet will lose some market share in the e-commerce segment, its impact will not be significant. The feature would not only provide convenience to many US consumers, but also give US retailers access to Amazon's significant e-commerce market share, which accounts for over 148.6M Prime members as of FY2021. Though Amazon plans to make the feature available to invite-only US retailers first, we expect more online platforms to adopt it once it is available nationwide, and speculatively, globally. Its goal to penetrate the broader e-commerce market is evident through the company's bundled services, including Amazon Pay and Fulfillment by Amazon (FBA), the company's free and fast shipping with free returns. RichVintage/E+ via Getty Images Investment ThesisĪ, Inc ( NASDAQ: AMZN) has gone on the offensive by announcing its plans to offer 'Buy with Prime' beyond its own platform in the US. ![]()
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