Swot Analysis Of Company Practices: PayPal

The online payment systems provider that we have chosen is PayPal. PayPal is an e-commerce business that allows payments and money transfer to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as cheque and money orders. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing. PayPal is an example of a payment intermediary service that facilitates worldwide e-commerce. PayPal is an eBay subsidiary company and is made up of three leading online payment services: the PayPal global payment service, the Payflow Gateway and Bill Me Later. The company’s open payment platform, PayPal X, that allows developers to build innovative payment applications on multiple platforms and devices.

PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It charges transaction fee for receiving money. The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient’s account type. In addition, PayPal is also the preferred way to send secure payments on eBay. With PayPal, customers who have an online account can makes it easy to send money from a variety of sources to a variety of recipients without sharing his or her financial information. Besides that, the recipient never sees their credit card number or their banking information.

So, as a buyer, customers can pay for their item online through PayPal. They have the choice of funding their payment with their debit card, credit card, bank account or PayPal balance. Sellers are notified by email of their PayPal payment immediately, and can confidently post the goods to them right away. As a seller, he or she can withdraw those funds to their bank account or use them to send a payment to someone else. If for any reason a refund is required, a seller can quickly and easily send a refund to the buyer directly into their PayPal account.

PayPal is the result of a March 2000 merger between Confinity and X.com. Confinity was founded in December 1998 by Max Levchin, Peter Thiel, and Luke Nosek, and Ken Howery, initially as a Palm Pilot payments and cryptography company. Both Confinity and X.com launched their websites in late 1999. X.com was founded by Elon Musk in March 1999, initially as an Internet financial services company. Both companies were located on University Avenue in Palo Alto. Confinity’s website was initially focused on reconciling beamed payments from Palm Pilots with email payments as a feature and X.com’s website primarily featured financial services with email payments as a feature.

In October 2002, PayPal was acquired by eBay. PayPal had previously been the payment method of choice by more than fifty percent of eBay users, and the service competed with eBay’s subsidiary Billpoint, eBay has since phased out its Billpoint service in favor of retaining the PayPal brand. Currently, PayPal operates in 190 markets, and it manages over 223 million accounts, more than 73 million of them active. PayPal allows customers to send, receive, and hold funds in 19 currencies worldwide. These currencies are the Australian dollar, Brazilian real, Canadian dollar, Euro, pound sterling, Japanese yen, and others. PayPal operates locally 13 countries, residents in 194 markets can use PayPal in their local markets to send money online.

SWOT Analysis of company practices

Strengths

The strengths of a business are positive elements, something they do well and are under their control. The following we will see the main strengths of the PayPal. The first strength we will talk about is the business alliance of PayPal. Because of social website that has users from all over the world- Facebook has brings the PayPal to manage its payment make PayPal increase more revenue. Facebook find out that 70 percent of its 400 million users live outside the United States, so it can be hard for them to transfer money to the company online. While PayPal has more than 81 million active accounts, it can help Facebook to collect money easily. Having alliances with other strong and popular IT businesses is a major plus point for PayPal as it helps bring in new customers and make business more effective.

PayPal appear as the only online global payment system in the world. It is a key to success for PayPal to work hard for it boosts reputation, profit and market share. PayPal has an impressive growth from year to year. It has around 70 million active users in 2008 and it is 23% more than 2007. PayPal operates in 190 markets, 17 local languages, and transacts in 19 currencies and it operates with 27 global financial networks and 15,000 local banks around the world. No other companies have this advanced system except the market leader- PayPal. It has a high percentage of the market share, meaning it is ahead of many competitors.

Competitive pricing is a vital element of PayPal’s overall success. With the cost effective payment system online such as the ‘Pay as you go’ system that allow customers pay only if they are making money online unless they are using more advanced options. Such pricing keep PayPal above its rivals. PayPal need you just simply pay a percentage of the payments received, typically between 1.4 and 3.4% plus a fixed amount of 20p per transaction. And it is totally free to set-up a PayPal account for your business with no hidden start-up costs or yearly subscription fees.

It is often the case that a potential customer may not heard of your business, but they certainly have seen or heard of PayPal before. PayPal logo can be easily seen by the users of internet because it appears in almost every auction website and even in many website that provide services as the payment method. They are therefore more likely to consider purchasing from your website as they some more do not have to give their financial details if use PayPal. A strong brand is an essential strength of PayPal as it is recognized and respected. Now the system has 100 million satisfied users worldwide and more websites use PayPal than any other payment gateway.

The other strength of PayPal is convenience it brings to the public. PayPal website and payment service is user friendly. It is easy and simple to use, even for those who have no or little experience in selling or buying online. PayPal main focus is on the ease of use for both receivers and senders of cash. It also uses its securing system to help protects consumer’s personal information, and provides payments to merchants without ever providing your personal financial information. Merchants will not get the credit card information of the consumers, it decreasing the chance of breaching personal information. The ability to accept online payments typically only afforded to larger businesses with traditional credit card services but with the appeal of PayPal, it offers merchants, specifically smaller businesses can afford online payments. In essence, PayPal provide a per-to-peer payment channel by acts as a mediator between consumers and merchants.

Weakness

The first weakness of PayPal is the weak system of it. Currently, PayPal is not using a database-driven ordering system. For most of the online merchants with 25 to 500,000 products for sale online set up a spreadsheet or database that contains their product information by using specialized software. They make changes to the database on a desktop computer, such as price increases, inventory on hand, adding or deleting a product, altering color choices, initiating special sales, etc. These changes then will replace the older product database and show up the new product database on the website. But the PayPal system stores the order buttons of customers in an online database of sorts, but customers can only access it by using the web interface. It works quite smooth if customers only making one or two changes. But if customers have a lot of products, they forced to make the changes constantly. It will cause customers waste too much time while the time is most conscious for business.

The other weakness is the bad communication between PayPal and its customer. The complaining system and the customer service at the PayPal website are too ineffective. Many complaints from time to time claim that PayPal has shut down a customer’s account arbitrarily and won’t listen to any reason. But it’s not hard to know that PayPal works very hard to keep its system secure and fraud-free. When it finds out customers doing things that skid along the edge of its policies, it may shut them down arbitrarily. As PayPal is act in such way for good reasons, it should try to communicate with customers and let them know more about their action like send e-mail or phone call them so the misunderstand can be decrease.

The limited flexibility of the PayPal system is due to its inflexible Hosted Ordering Interface. It provides an inflexible ordering interface that can be confusing to shoppers. PayPal allow customers to customize the interface a bit by adding their logo, selecting background colors, and border styles but customers’ ability to customize the order page is only in cosmetic ways. PayPal does not have an ordering system with open code that a programmer can manipulate to suit customers particular e-commerce needs. Some of the strongest conversion rate gains can be made by testing and streamlining an order interface in this way. That’s the reason why the PayPal’s order interface is clunky and can be confusing.

Opportunities

Acquisition is one of the opportunities for PayPal as it can bring more customers to PayPal especially with company that also run IT business. eBay announce that it will phase out its own competing service to PayPal that is eBay Payments by Billpoint and has acquire online payments company PayPal in a deal valued at $1.5 billion. This is very beneficial to PayPal as bulk of its business comes from eBay auctions. This event sure will result in improving PayPal’s profit, market share and reputation.

Innovation of new technology can be defined as an opportunity to the PayPal. PayPal has reached an agreement with USAA Federal Savings Bank (USAA Bank) that will allow it to start developing a person to person payment solution for USAA members. This payment solution is something that USAA Bank plans to deliver in 2011. In future, USAA’s members will be able to pay almost anyone with an e-mail address or mobile phone number, in real-time, and directly from their mobile phone. By keep working hard to provide more innovative product to the public, PayPal can gain more and more potential customer. Another example we can see is by releasing new APIs (Application Programming Interfaces), PayPal is challenging the developer community to change the way we pay through innovation and new technologies. As the only open global payment platform, PayPal is unlocking the door to an unparalleled business proposition to developers that is create new, innovative ways to pay and get paid. And, the global payments market represents a $30 trillion opportunity according to a recent McKinsey report.

Furthermore, the efforts of PayPal on product and services expansion have upgraded its own mainframe system to every corner of the world. To show its efforts in product and services expansion, PayPal has expanded its micropayments pricing, available to any member with a PayPal Business or Premier account. Micropayments fees for US dollar transactions are 5% + 5 cents per transaction. When compared to PayPal’s standard fees (2.9% + 30 cents), the micropayments rate can save money for merchants whose average selling price is below $12. Although micropayments is not new to PayPal, but this micropayments pricing was previously available only to account holders in select countries. With this expansion, PayPal are making it available to any PayPal Business or Premier account holder worldwide using any of PayPal’s 19 supported currencies. In addition, this micropayments pricing can be used with any of PayPal’s payment products including Website Payments Standard, Website Payments Pro and for eBay sellers.

The massive power of the Web can be recognized in its global effect on commerce. A global commerce for business exchange known as PayPal has been required because this medium is so strong worldwide. PayPal is recognized as an actual commerce with value around the world, and it makes someone in Europe can purchase a product from the United States while the neither party without PayPal has to struggle with the transfer of money options or exchange rates. The creation of a global commerce exchange system at a local consumer level makes this result happen.

Threats

The actions of a competitor could be a major threat against PayPal, for instance, if they bring in new technology or increase their workforce to meet demand. PayPal has several competitors such as eMoney Mail, Ecount and payMe. eMoney Mail provide delivers payments faster than the competition and its additional security ensures money doesn’t end up in the wrong hands. Ecount lets customers specify the day they want money to arrive and provides payees with an online account to spend money on the Web, and it provide 24/7 toll-free customer support too. payMe deposits money in credit card and checking the accounts and it do not limit to the amount you can send overall. Both of the competitors try to give their best services, if PayPal do not work hard and efficient enough, it will lose its market share and reputation.

Price wars between competitors that occur due to competitor keep invent new technology could damage profits for PayPal. As in year2006, Google plans to use Checkout, a service released in June that lets users buy items from multiple stores using a single account. Its purpose is to generate commissions and encourage more merchants to buy advertisements. At that time, the PayPal payment unit was EBay’s fastest-growing business in the third quarter. PayPal’s revenue climbed 41% to $350 million, outpacing a gain of 22% in auction revenue to $1.02 billion. Google Checkout wants to attract customers and therefore make charges a 2% commission and a 20-cent fee per purchase. While PayPal, which EBay acquired in 2002, charges a 30-cent rate, plus transaction fees of 1.9% to 2.9%, depending on the total value of payments processed each month. But in EBay’s promotion announced, customers receive as much as $20 in cash-back rebates from PayPal when they make online purchases on EBay.com and certain merchant websites in North America. As we all can see, price wars will cut off the profit of the company.

PayPal do not invest in the advertising on the internet causes the brand image of PayPal is not very well. So it also has a need to strengthen its brand through the Web. In the image of the public, PayPal’s brand is closely associated with smaller merchants, low-cost auctions, and P2P money transfer. As a result, some larger firms might not want their brands associated with PayPal brand image. They may think that by this way public could devalue a corporation’s stronger brand. The fact remains that consumers associate its brand with less expensive, cheaper items even though PayPal is an enormous corporation. In order to solve this problem, PayPal should look to network with larger companies through the possible branding of a service associated with corporations. Furthermore, PayPal has the ability to introduce and market a new brand, such as CorpXchange or CorpCash by promoting the same services but without the “low-cost auctions” associated with PayPal.

Porter’s Five forces of company practices

The threat of the entry of new competitors

Nowadays, barriers to entry of e-commerce business is low because of anything that internet technology eliminates or makes easier to do reduces the barriers to entry such as in the need for a sales force, access to channels and physical assets. Besides that, internet applications are difficult to keep proprietary from new entrants. This lead to a flood of new entrants has come into many industries, and one of the industries is e-commerce business. There are many new companies which provide similar services as PayPal such as Billpoint, Citibank’s c2it, whose service was closed in late 2003, Yahoo!’s PayDirect, whose service was closed in late 2004, and BidPay, which was shut down in 2006. However, there are still some new and former competitors such as Google Checkout, Wirecard, Moneybookers, The InstantPay (launching Jan 2011), 2Checkout.com, CCNow and Kagi still remain in business. But this does not affects PayPal’s revenue as it has impressive growth throughout many years. In 2008, its revenue is US$ 60 billion, which increased 27% compared to the previous year, and US$ 71 billion in 2009, an increase of 19% over the previous year.

During the early year of PayPal, there are lesser competitors, which means PayPal has a bigger market shares and this lead to more customers are using PayPal for their services. As time goes on, internet technology has grown more advance and this makes internet applications are very easy and attract more new entrants. New entrants join the market make the market shares of PayPal is getting smaller. This is because customers have more choices when choosing a right online payment service provider to process their payment. Besides that, some of the competitors got better offer than PayPal, such as cheaper charges and safer transaction process. This leads to the decrease of customers loyalty to PayPal and becoming a threat to the company.

Google Checkout is one of the new entrant and main competitors with PayPal. It is an online payment processing service provided by Google aimed at simplifying the process of paying for online purchases on 28 June 2006. Users store their credit or debit card and shipping information in their Google Account, so that they can purchase anything at participating stores at the click of a button. It also offers fraud protection, as well a unified page for tracking purchases and their status. It also provide service with lower cost compared to PayPal. Unlike who only provide fraud protection for sales of more than $50, Google Checkout provide 100% fraud protection and 100% refund, but users must report it within 60 days. All these has make Google Checkout to become a threat to PayPal.

Another new entrant is Wirecard AG, a global financial services and technology company founded in 1999. In November 2006, Wirecard has launched an internet payment service called “Wirecard”. By registering online, consumer can opens an account at Wirecard Bank which he can load by cash, cards, direct debit, wire transfer or various local payment schemes. The service includes a free virtual prepaid MasterCard for consumers that can be used to pay at millions of MasterCard locations worldwide. Apart from standard MasterCard products, the Wirecard system also let users to send each other money in real-time. There is also optional physical MasterCard enables users to pay at 24.7 million MasterCard brick&mortar acceptance points and to withdraw cash at nearly 1 million ATMs worldwide. People may consider to use Wirecard because it is operated by a true bank. Unlike PayPal, Wirecard cannot simply freeze or limit customers accounts without a reasonable explanations. It may get suit by customers. Therefore, PayPal should start to consider not to be just protecting its own interest, but protect its customers interest as well so it would not lose its customers.

PayPal has some solutions to overcome the threat of losing customers loyalty to the company. One of the solution is PayPal has acquired a company named Fraud Sciences, which is expert in online risk tools to enhance eBay and PayPal’s proprietary fraud management systems and accelerate the development of improved fraud detection tools. On the other hand. eBay, as the parent company to PayPal, has added Google Checkout to its banned payment methods list to prevent eBay users from using Google Checkout. With this way, PayPal’s competitors will become lesser, thus the market share of the company will become bigger and also secure the customers loyalty to PayPal.

The intensity of competitive rivalry

As internet technology become more advance from time to time, it reduces the differences among competitors as offerings are difficult to keep proprietary. Therefore, PayPal used the alliance strategy to get larger percentage of market shares than other competitors. For example, on 18 Feb 2010, Facebook announced a partnership with PayPal in which users can now pay for their Facebook Credits by using the payment provider. Facebook had test other payment solution before making decision to have a partnership with PayPal, however the ability to pay for the virtual transactions through PayPal is great considering they have more than 81 million accounts. this prove that PayPal is good enough to handle massive amount of online transactions. Thus the company is intensifying pressures to other rivals as this partnership give many benefits to PayPal its market shares are getting bigger.

PayPal also intensify pressure on its mobile payment service rivals too. Obopay is the company founded in 2005 that provide mobile payment service in United States. It is a service that allows the transfer of money between mobile phones. After a customer creates an Obopay account, they can add money from a credit card, debit card, or a bank transfer. This make people a lot easier because most of the people will carry a hand phone with them. However, PayPal announced its inclusion in Sprint Nextel’s MyMoneyManager suite of mobile financial services in 2008. It is the innovation strategy that it used to attract new customers and provide a wider range of services to its former customers too. PayPal and partner mFoundry are on deck to provide banking services for Sprint, making it the first major operator in United States to have mobile money transfers between subscribers. Its fee is also cheaper than Obopay too. By doing this, PayPal has intensified pressure to Obopay and also show its intensity of competitive rivalry is very strong.

Besides that, internet advance technology also leads to migrates competition to price among competitors. Although PayPal charges and fees for online payment processing are slightly higher than the other competitors, it can still have a lot of loyal customers and new customers using its services. The reason is currently, PayPal operates in 190 markets, and it manages over 223 million accounts, and more than 73 million of the accounts are active. PayPal also allows customers to send, receive, and hold funds in 19 currencies worldwide and it operates with 27 global financial networks and 15,000 local banks around the world. It also operates in 13 countries. The wide range of services provided by PayPal is a better choice than its competitors as none of them can provide such services. Customers with a PayPal accounts can also make payment for many other services and products which make things a lot easier. Customers do not have to open another account for just that particular payment.

The threat of substitute products or services

This analysis will identify the likelihood that customers to your industry will switch to purchasing an alternative product or use an alternative services from outside your industry. With the advance of internet technology, the proliferation of internet approaches creates new substitutions threat in many industries. There are many alternative apart from online payment providers in the e-commerce market such as, credit card, debit card, checks, money order and e-banking. For local transactions, consumers will use these kinds of traditional methods rather than PayPal. If a person buy a product with credit card, all he need to pay is the price of the product and interest charged by bank. However, if he pay the bank early, he would not be charged with any interest and this method will be cheaper than using PayPal. If a person does not has a credit card, they can use online banking to make their payment as all they need is just a saving account in the particular bank. Besides that, having a saving account at a bank are better than having a PayPal account as there are many complaint from its customers that PayPal freeze its users account arbitrarily and won’t listen to any reason. PayPal can freeze its users account easily without giving prior notice because it is not supervise by the bank regulation. Therefore, this will lead to a higher threat to PayPal for its users to change to use other substitute services.

There are also many complaint from its users that PayPal security against fraud is not good. Users are easy to get scam or the confidential data are easy to be stolen. To avoid this situation happens, buyers can use money order to make payment as well. money order

As for merchants, their substitute service apart from PayPal is merchant account. Merchant account is a type of bank account that allow businesses to accept payments by debit or credit cards. A merchant account also serves as an agreement between a retailer, a merchant bank and payment processor for the settlement of credit card and/or debit card transactions. PayPal charges fees by per transaction, while merchant account is charging fees monthly and fix. Therefore, PayPal usually used by small business merchant as payment processor as the cost is cheaper. While for merchant that have massive transaction, most of them use merchant account as their payment processor because it will be cheaper than using PayPal.

The bargaining power of buyers

The bargaining power of customers is the ability of customers to put the firm under pressure, which also affects the customer’s sensitivity to price changes. The advanced internet technology has reduced switching costs of buyers and this makes the buyer would not simply switch to use other companies’ services. Although the fees charges to PayPal users are more expensive than its competitors, it still does not lower down the fees. This is because of PayPal provides to its users better services than its rivals, such as providing customers to hold up to 19 currencies of different countries so they can make their payment easily. It is the only company that can allows users hold that much currencies and requires high fixed costs to maintain this type of services. Customers that wishes to bargain for lower fees are maybe just a small portion among all the PayPal users too. If PayPal lower down its fee just for such small portion of unsatisfied customers, it may bring huge losses to the company. Therefore, even though some users maybe price sensitive and bargain for a lower fees, PayPal will not make any changes as it would not greatly reduce its profit by losing a small portion of its users.

The bargaining power of suppliers

For PayPal, its suppliers are the banks and companies that provide financial networks in worldwide. The bargaining power of suppliers is low because with the internet, all companies has equal access to suppliers, and gravitate procurements to standardised products that reduce differentiation among competitors. standardised products or services makes the suppliers cannot charged high prices because there are too many similar products that other suppliers can provide. The banks, which are the suppliers to all online payment providers competing to each others with quality of services and low interest rates. Therefore, PayPal has many choices to choose for which suppliers is best suits with it. However, PayPal try to make deals with most of the local banks so it can have a wider range of services that can attract customers to use PayPal. It will not have to worry about the suppliers that charge excessive high price on unique products or service because if they do so, PayPal can just try to find another suppliers that charge reasonable price.

Besides that, suppliers concentration to firm concentration ratio for PayPal is high because of its brand equity is high. Brand equity is brand’s power that derived from the goodwill and name recognition it has earned over time, and which turns into higher sales volume and higher profit margins against competing brands. PayPal’s high brand equity will keep attracts customers use PayPal services and this will lead to more services must be provided by the bank to PayPal. Banks will earn more profit by providing more services to it and indirectly makes the bargaining powers of suppliers become low as they need PayPal to generate more profit.

Customer Relationship Management

Customer Relationship Management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It includes one-to-one relationship between a customer and a seller which encourage customer participation in product development. CRM create one simple idea “Treat different customers differently”, which means that different customers are treat based on their different needs and different value to company. Besides that, CRM using information technology strategy aimed at identifying, acquiring, targeting and retaining the best mix of customers. CRM also describes a company-wide business strategy which including customer-interface departments as well as other departments.

Furthermore, CRM also helps in understanding customer needs and building relationships with them and by providing the most suitable products with a high level of customer service. It integrates back and front office systems to create a database of customer contracts, purchases, information requested and technical support. This database helps the firm to present a unified face to its customer and improve the quality of the relationship. The primary goal of CRM is to improve long-term growth and profitability through a better understanding of customer behavior. There are 3 phases in which CRM support the relationship between a business and its customers are to acquire, enhance and retain. CRM can help a business acquire new customers through contact management, selling and fulfillment. A web enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of one-stop shopping. CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.

For any business to be successful employers need to look into various objectives which are beneficial for the customers. A good customer employee relationship always leads to positive outcomes for the business. CRM is a new introduction in E-commerce and played major rule in the development of e-business specially the CRM stands for customer relationship. It is a strategy used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success. A primary objective of CRM is to provide the entire organization with a complete and 360-degree view of the customer, no matter where the information resides. The benefits of adopting CRM processes are develop better communication channels, create detailed profiles of individual customers, increased customer satisfaction, customer service and support and increased revenues of the organization.

There are 3 types of CRM which are operational CRM, analytical CRM and collaborative CRM. Operational CRM describes the technology strategy of managing and interacting with customers across channels through client facing applications and integrated channel management. Operational CRM applications are technologies that enable sales force, marketing and customer care automation. Analytical CRM is a decision support system that is targeted to helping senior executives, marketing, sales and customer support personnel to better understand and capitalize upon the customer needs, company’s interactions with the customer and the customer buying cycle. Collaborative CRM is an approach in which the various departments of a company, such as sales, technical support and marketing, share any information they collect from interactions with customers. For example, customer feedback gathered from a technical support session could inform marketing staff about products and services that might be of interest to the customer.

Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) is an enterprise system that provides a single information system for organization-wide coordination and integration of key business processes. Hereby, ERP integrates interdependent software modules with a common central database that support central database use to manage internal and external resources in whole organization. The resources from central database that was previously fragmented in different systems can seamlessly flow throughout the firm so that entire organization business processes such as human resources and accounting can share it. Besides that, ERP system is comprised of a set of applications that automate routine back-end operations such as financial management and order fulfillment, it is also include front-end operations such as field sales and services. In addition, ERP system controls all major business processes with single software architecture in real time. Thus, its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.

Obviously, ERP as an implementation in the real world through a computer-based system can help an organization growth rapidly. Therefore, business value of ERP becomes more important and it is necessary for a modern organization. Firstly, ERP helps to create a uniform organization by using one common interface in every department’s portals. Secondly, ERP helps to increase an organization more efficient operations and customer-driven business process. Finally, ERP creates firm-wide information in central database that can be used for managers improved decision-making. Nowadays, leading ERP software vendors such as SAP, Oracle, and Microsoft Dynamics help many industries growth up and successful.

At the same time, implement ERP system still has some of challenges and difficulty in organization. This is because ERP system is a complex system with necessary related technology and speciality skills. Accordingly, ERP system is difficult to build due to requires complex pieces of software and large investments of time, money, and expertise. Hence, the company has to provide training programmes for employees understand to use well in ERP system. It is also requires fundamental changes in the way of the business operates when the organization first time to implement ERP system. Besides that, centralized organizational coordination and its decision-making also may not suitable for every industry to operate its business.

The development of PayPal influences e-commerce deeply and it is also increased global e-commerce growth and develops rapidly. Actually, PayPal’s ERP system may under eBay due to PayPal is a subsidiary of eBay. Currently, PayPal operates in 190 markets, and it manages over 223 million accounts. Hereby, PayPal is necessary to have a stable and good online ERP system with central database to manage the data of its huge account. As an Information Technology (IT) industry, PayPal is operating with combines the advanced management ideas and the latest IT and Information System (IS). Thus, PayPal processes the payment transfers via e-mail payments. In the payment transfer, the parties between whom the payment is exchanged cannot see each other’s credit card or bank information. To protect customers, PayPal keeps the information of its customers in an encrypted form. PayPal save the customers data as top secret in own server, and its server is not directly connect to network. Besides that, ERP system helps PayPal in the entire business processes includes data query and comprehensive analysis for decision-making, management of business processes and control of enterprise management, and businesses achieved. ERP system is also helps back-end operations of PayPal easier to manage the complex and huge data and its resources. To extend the business of PayPal in global markets, PayPal accepts credit card and debit card on the website. Moreover, PayPal provides a new platform which is PayPal X also know as PayPal X Developer Network (https://www.x.com). From the official note, PayPal X is a new brand that represents the PayPal Developer Network and the APIs/Services developers use that enable collecting payments from different platforms, devices, and applications. PayPal X also is a platform launched with new technology and it will strengthen its IT and IS advantage. Additionally, PayPal co-operation with many bankers and e-commerce website, this provides a way for different people with different needs in different industries and links them together. Therefore, PayPal today is not only an online payment system provider; it is a suite of many different payment systems.

Nowadays, popularity of internet helps ERP system become a key to success for modern enterprise. Thus, PayPal implement ERP system with eBay leading PayPal become a modern organization with internet and it is also success as a global online payment system provider. To easier manage an organization and enhance operation of a firm with efficiency and effective, ERP system is indispensable for industry’s expansion.

Conclusion

There are many key point of the success factors for PayPal, first is the business alliance. For example, PayPal has announce its partnerships with Facebook and mFoundry as previously mention. It is the innovation strategy that PayPal used to attract new customers and provide a wider range of services to its former customers too. Through this strategy implemented by PayPal, it also brings great profit to the company.

Second is PayPal appear as the only online global payment system in the world. It is also one of the leading company among all the online payment service providers. This is because PayPal provides a wider range of services and higher percentage of market shares compare to other competitors.

Third is PayPal logo can be easily seen by the users of internet because it appears in almost every auction websites and even in many website that provide services as the payment method. Now the system has 100 million satisfied users worldwide and more websites use PayPal than any other payment gateway. This is all because of PayPal has a high brand equity and this is also one of the important key point of success of the company.

Forth is its website and payment service is user friendly. It is easy and convenient to use, even for those who have no or little experience in selling or buying online. Besides that, user friendly also means not save time when customer uses PayPal’s system because he or she does not need to take time to think and figure out how the system works.

Therefore, other companies which doing the same business PayPal should take it as an example so that they can be as successful as PayPal.

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