Major online payment processing services including eBay Inc (NASDAQ:EBAY)’s PayPal, Amazon.com, Inc. (NASDAQ:AMZN), and Alipay are breaching into the lending industry with huge loan portfolios.
One of the biggest surprises came from the IPO filings of Alibaba Group Holding Limited, which stated that Alipay processed online transactions worth at least $10 billion. Further, the payment gateway processed transactions worth over $50 billion in the 12 months as of March. It might not be a considerable amount in comparison with Visa and MasterCard, however, the amount is sufficient to dwarf the loan portfolios of several small U.S. Banks.
The online payment service industry is under a lot of pressure from new players and Amazon.com, Inc (NASDAQ:AMZN) is one of the newest players with its Amazon Local Register payment service. Further, the company is offering a promotional low rate of 1.75% per transactions until January 1, 2016 for the customers signing up before October 31. Matt Swann, VP Amazon Local Commerce, said,
“From clothing stores to contractors, food trucks to accountants, businesses and organizations using Amazon Local Register will enjoy industry-leading low rates, trusted and secure payment processing, and access to award-winning customer support.”
eBay Inc (NASDAQ:EBAY)’s PayPal is leading the online payment service sector with transactions worth $55 billion in the second quarter 2014. However, the transactions of PayPal might see a gradual decrease with more service providers and considering the fact that another market leader, Apple Inc (NASDAQ:AAPL), is planning to enter the market soon. Apple Inc (NASDAQ:AAPL) is said to be in talk with Mastercard Inc (NYSE:MA), Visa Inc (NYSE:V), and American Express Company (NYSE:AXP) for its payment gateway. Apple’s iWallet is said to get support from all of these companies with a huge existing market share.
This article has been written by Prakash Pandey and edited by Serkan Unal.