The countdown has begun. PayPal is about to launch on a new growth path and Dan Schulman is strapped in as the companies new CEO and pilot. So what is the future for the larger e-commerce payment and mobile wallet space? And what is the future for PayPal in that space?
PayPal is currently a wholly owned subsidiary of eBay (EBAY) . The answer to the question is simple. There is no answer to the question. Not yet. While I firmly believe in this is a rapidly growing space, there is no way yet to tell who the leaders will be going forward or what technologies will be introduced in coming years.
Leadership in this rapidly growing and changing space will come from companies who successfully recreate the entire brand experience going forward. PayPal has led in the past, but going forward there are lots of big, brand name competitors stepping up so competition will be intense going forward.
PayPal Done Great Job To Date
PayPal was one of the original companies, which started this entire space. That history will help them going forward, but history is a double-edged sword. It can mean strength, but it can also hold a company back. Nothing stays the same. Everything either moves forward or falls back.
Ecommerce and the mobile wallet have suddenly begun to rapidly moving forward over recent years. All of a sudden there are many big, brand names that are expected to grow and change rapidly in this space.
The new mobile wallet space includes players like Apple Pay (AAPL) , Google Wallet (GOOG) , Samsung LoopPay (SSNNF) , CurrentC, BitCoin and many more which will enter the scene in coming years. In fact we are just in the very early days of this new mobile wallet revolution.
This space may have been with us for the last decade or two, but these companies are reinventing the idea of mobile pay and ecommerce. PayPal may have been there from the beginning, but they now face new and intense competition from these companies and ideas.
PayPal Must Update Their Image and Brand
That means PayPal must update their image and brand in the marketplace. They must lead with innovation going forward. They cannot sit still or this new world will pass them by and leave them behind in the dust.
So who will lead? Right now I would say newcomers are getting the lions share of media attention. That’s one of the immediate challenges for PayPal. Media attention is one key to leadership and success.
Industry leadership can change in an instant. Remember when Blackberry (BBRY) and Nokia (NOK) led the wireless handset space? Today they are struggling while Apple iPhone, Google Android and Samsung Galaxy now lead the space.
Companies either grow or shrink. They never stay the same. So PayPal needs to continue to innovate, update and grow. They face new challengers every day.
That’s the challenge PayPal is facing right now. They need to refresh, update and expand their brand and offerings. The brand is the relationship with the customer. This is one of the most important keys to success going forward.
To win going forward, PayPal must be at the core of the new innovative explosion. They must lead. That’s the challenge and the opportunity for new CEO Dan Schulman.
The Dan Schulman Challenge
Look at this challenge the same as other’s we have seen in recent years. Example, AT&T (T) had a similar challenge a decade ago when SBC acquired AT&T, BellSouth and Cingular. The new AT&T is a brand new, strong, innovative and growing leader. They did it right.
While PayPal has a strong brand in this space, the marketplace is changing. The question is will they successfully reinvent themselves fortomorrow? Will they be like AT&T or like Blackberry?
Dan Schulman is one of the nicest people you will ever meet. I believe he is one of the most talented executives as well. He may be just what PayPal needs at this point in time. He has lead many companies such as Virgin Mobile under Richard Branson before it was acquired by Sprint. He has worked with Symantec and American Express.
What Schulman and PayPal do next will make or break their future. The challenge is real, but so are the opportunities. He has been in the fire and I believe he understands this new challenge. Vision and execution is what is now required.
So I want to say congratulations and success to Dan Schulman and PayPal. We are watching closely and hoping you hit a home run in this growing and changing space. Batter up!
Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com
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