PayPal Launches Digital IOUs Amid Fierce Competition To Own The Digital Wallet

PayPal Launches Digital IOUs Amid Fierce Competition To Own The Digital Wallet

In an attempt to expand its e-commerce payment system dominance, PayPal is introducing a new service called PayPal.Me to make it easier for people to pay their friends back and even purchase a pie at a bake sale simply by using their phones.

PayPal is rolling out the new service in order to boost user growth for PayPal’s other services. It also is staying current with the times as digital wallets continue to gain popularity among consumers which has led to successful competitors like Venmo and most recently Apple Pay.

PayPal’s Director of Consumer Product Marketing, Matt Gromada, stated that, “As we see money going digital and mobile, people need more flexible ways to manage their money. It’s simple – we all want no-fuss to pay and get paid back, and avoid awkward IOU conversations. PayPal pioneered sending money digitally 16 years ago, and we are continuing to lead the way with our P2P offerings.”

PayPal recently conducted a survey of 4,000 consumers in Germany, Canada, Australia and the United States. The study shows that one-third of adults in the United States have a ruined personal relationship over IOUs. The main reason for this is that people simply feel uncomfortable asking their friends and loved ones to pay back owed money.

Psychology professor Dr. Ryan Howell aptly stated that, “Money is still considered an incredibly private, personal topic for many people due to deep-seated cross-cultural stigmas around money.”

That is where PayPal.Me comes in. It is a free, personal service that people can use to request money from anyone anywhere in the world. It is a personal link that can be sent to friends, family or anyone else for a quick, easy way to pay someone back.

As PayPal’s head of consumer marketing, Kerry Reynolds, points out, PayPal’s “primary mandate has been to make it easy to move money around the globe and back and forth, making it easier for users to access their money.”

With PayPal’s success in pioneering the e-commerce payment industry, it seems likely that it will succeed with peer-to-peer commerce with PayPal.Me. Its goal of becoming the basic unit of pay-with-your phone in the mobile era is definitely on the right track though it remains to be seen if it will dominate the space like it once did for online payments.

The reason is because Venmo has already been offering this type of service for years and one can’t necessarily rule out Apple Pay having created a similar platform. Then there are banks and other startups all looking to tackle the same problem, albeit without PayPal’s scale.