At first impression, I thought Digital River (DR) and Paypal
are truly just competing with each other, because they provide the same
service. They act as the middle actors between banks, merchants and buyers. However,
I am quite surprise that these two digital companies are able to form mutual
connection. DR is the client of Paypal and Paypal is the client of DR?
I tried to open one of the websites powered by DR, for e.g. http://shopsandisk.com. I chose a USB
Flashdrive and then I checkout. Yes, I could see Paypal logo placed on the
second option of payment (The first option is payment by credit card like using
VISA, MasterCard, Amex and etc.). yes, of course
Then I compare to Paypal which using DR World Payment
service in Brazil and Mexico. I learnt why Paypal want to use DR services
because Paypal want to enter the markets as quickly as possible and provide
solution for eCommerce in the region with existing banking relationship that DR
had already settled.
When I found out ecommerce website in brazil http://www.olook.com.br tried
to buy something and Yes, there is also Paypay logo on it. In my opinion, it means
DR help Paypal to be included as one of payment services on the website. And DR might take care of the payment from Paypal accounts
to local bank accounts in Brazil which DR has already had settlement.
But how about other competitors? Should we consider Google.
It has resources, experiences and fame with many success stories, like Google
Wallet. I think Google Wallet is the real threat. The popularity of Android
Smartphone will boost the use of Google Wallet. But still we have not seen the
wave yet.
In the future, I suggest that Paypal and DR should consider merging
their services in e-commerce payment provider business. This move will strengthen
their position in market against Google Wallet with its Google Checkout system that provide same
services that DR and Paypal have.
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