As you know by now, eBay is spinning off its PayPal into a separate company. Is the PayPal spin-off good for small businesses?
In short: Yes.
Why? PayPal will be more agile, more able to compete and to innovate more quickly.
It’s good for you
That’s not just good for PayPal. It’s good for small businesses who want a strong e-payment ecosystem, with lots of choices of mobile payment systems — leading to less costly options and more convenient technology all at once.
Also, PayPal’s tight connection to eBay was preventing tight partnerships with big players like Amazon. If Amazon won’t adopt a technology, that prevents the ecosystem from growing (it slows adoption by other businesses), and slows PayPal’s development of new technology to meet all businesses’ needs.
It’s like eBay CEO John Donahoe told Reuters — “The pace of change in this competitive environment … is accelerating and will continue to over the next three to five years.”
If PayPal leads, more opportunities follow
PayPal knows they must be part of that — and we should hope they are too. PayPal has led the online payment field for a long time (with over 150 million users now) and is trusted as a safe way to e-pay. What the leader does will affect how well the ecosystem grows, and the more it grows, the greater the opportunity for small business to benefit from it.
So how does PayPal’s spin-off affect your small business today? It’s a signal that if you’re not already using a mobile payment platform, it’s time to weigh the options and dive in.
Now is the time
The hopes for secure, convenient e-payment ecosystem have been around a long time, while the reality has been slow to materialize. But this signal from PayPal along with the industry’s reaction to Apple Pay tells us now may be the time for things to change.
E-pay competitors are spawning and innovating — from Google Wallet to Braintree, Dwolla, Softcard, Square and Stripe — while big retailers like Whole Foods, Macy’s and McDonalds are opting in to accept mobile payments by phone from their customers.
Even tiny businesses — corner coffee shops and vendors at farmers’ markets — have been adopting mobile e-pay technology. Small businesses have the most to gain, and the least to lose in invested capital.
Why is PayPal’s spin-off good for you? Because more innovation and lower-cost mobile payment systems are good for you. But that only matters if you dive in.
Here are 8 reasons to embrace a mobile payment system now:
- It lets you accept credit cards when you otherwise couldn’t – duh.
- It puts you on par with big retailers — your customers take you more seriously and trust you more, when they can buy from you more easily.
- It’s cheaper than old-style point-of-sale systems, and easier to learn and implement — for you and your staff.
- It speeds up customer checkout. That makes today’s customer happy, and customers will return if your lines are always short.
- It helps you track inventory much more easily.
- It makes it easy to implement customer loyalty programs. No need for a loyalty card or to punch in a phone number — the customer’s loyalty info is stored in the app whenever they make a purchase.
- PayPal’s spin-off will help fast-track mobile payments into the mainstream. You need to embrace it, to keep up with your competition.
- Your customers want it. They’re finally ready — we’re no longer unfamiliar with online commerce. Not offering the option will even drive some customers away!
If your business doesn’t take e-payments yet, now’s the perfect time to start. Can you think of any reasons not to? Let me know in the comments or on Facebook!
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Who is John Paulsen? A former small-business leader myself, I feel your pain (and joy) and hope you’ll enjoy the blog. I launched and ran a well-regarded production company in San Francisco with a team of 9 brilliant, hard working people. I learned to manage a wide array of tasks a small business must handle — business strategy, facilities design, HR, payroll, taxes, marketing, all the way down to choosing telecom equipment and spec’ing a server system to help my team collaborate in real-time on dense media projects from multiple production rooms. I’ve partnered with and learned from dozens of small business owners.
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