PayPal went public in 2002, and immediately its market value skyrocketed. PHOTO/AFP
By Queen Munguti
In Summary
Equity Bank
last week announced that it had improved its online payment service in a
partnership with PayPal to enable its customers withdraw funds within
three days as opposed to eight, in an adaptive marketing move driven by
ever swifter wireless transactions.
For PayPal, which is also offering Kenyan businesses quick
access to money from overseas clients and enabling them to receive
payments in up to 25 currencies, constant innovation has become an
imperative both in Kenya’s e-commerce industry which by 2014 was valued
at Sh4.4bn, and globally.
“PayPal is focused on making e-commerce safer and
easier to use throughout Africa. Kenya has always been a priority market
for us and we are working to ensure that our services are convenient
for all our customers,” said Efi Dahan, the General Manager, Israel and
Africa for PayPal.
“By streamlining this process, merchants have even
more reason to use PayPal to sell their goods and services.” When PayPal
first launched in 1998, online card payments were still a challenge for
many businesses.
With its entry into the market, it offered individuals and businesses an easy way to take online payments
“PayPal’s founders figured out early on that it
could make a decent profit in this low-margin business of processing
transactions, if it could encourage enough users to fund PayPal payments
via bank accounts rather than financial cards,” said Michelle Evans,
the Euromonitor International Digital Consumer Manager in an article
titled, The Four Aspects of PayPal’s Current Growth Strategy.
“In time, it was speed, convenience and security
that made PayPal’s online platform popular, especially among eBay’s
small-time sellers. PayPal went public in 2002, and immediately its
market value skyrocketed. Within a year, eBay, which once dominated the
e-commerce market, bought the start-up for $1.5bn (Sh150bn) as it
realised PayPal was squeezing out its own in-house payment option.”
But the change did not stop for PayPal on its acquisition.
“In an age of disruptive start-ups and diminishing
competitive barriers, it is more important than ever before to
understand your customers and to act on that insight faster than the
competition,” said Norm Johnston, the Chief Digital and Strategy Officer
at Mindshare, in his book, Adaptive Marketing: Leveraging Real-Time
Data to Become a more Competitive and Successful Company.
“As adaptive marketing illustrates, rapidly
applying even just a single source of real-time data can lead to happier
customers and better ROI.” It is this knowledge of the market, and its
expertise in adapting to emerging trends, which now include stiff
competition in online payment systems, including from Google Pay and
Amazon, that have fuelled PayPal’s aggressive marketing in the past two
years.
In 2014, it rebranded, unveiling a new logo which
was meant to symbolise forwardness, innovation, and vision. “Our new
brand identity goes far beyond an updated logo,” said David Marcus, the
then president of PayPal.
“We have aligned this with our first global brand
campaign. We are setting a new expectation with our global consumers,
developers and merchants: PayPal is redefining the future of money by
putting people first.”
In doing so, PayPal was also moving to clearer
branding across multiple extensions. “Today’s marketplace is very noisy.
Brands must be particularly clear about what they want consumers to
remember about them,” said researchers of a 2013 paper C. Whan Park,
Andreas B. Eisingerich, Gratiana Pol and Jason Whan Park.
“Contrary to what one might expect, a brand’s
extension efforts to different product categories strengthen, rather
than weaken, the benefits of brand logos,” they found.
In the same year, PayPal split from eBay to form
two stand-alone companies, arguing the need to capitalise on their
different growth opportunities in the rapidly changing global commerce
and payments landscape.
Industry experts interpreted the reassertion of
Paypal’s independence and brand as a move to fight its competition, most
notably Apple Pay.
“Everyone is looking to eat their lunch,” said Denee
Carrington, an analyst with Forrester Research in an interview with
digital media website, Mashable.
“The split opens up a much broader landscape for PayPal to compete aggressively, because everyone else is gunning for them.”
- African Laughter
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