Why PayPal Sees Itself as a Budding 'Digital Commerce OS'

The online payment processor outlined at a high level its future plans, introduced some new partnerships and unveiled a new co-op-based service.

PayPal wants to be the world's so-called "digital commerce operating system" provider, not just a button to click for an online payment option. Though this sounds more like market positioning than anything else, there may be more than a modicum of truth in this bit of jargon.

On May 21 at a press event at Terra Gallery in San Francisco, the ubiquitous payment-processing service provider outlined at a high level its future plans, introduced some new partnerships and unveiled a new co-op-based service that gets retailers online quickly and efficiently.

As a result of this, PayPal—which is exiting its mothership, eBay, later this year to become a publicly traded company—ostensibly will be able to deliver "faster, safer and more elegant buying experiences," CEO-in-waiting Dan Shulman told conference attendees.

The May 21 news included:

--Partnership with Bigcommerce: PayPal and Bigcommerce, a fast-rising Web storefront provider, announced they have joined with Braintree to offer an end-to-end ecommerce solution that makes it easier to launch and grow an online store. As part of the collaboration, Bigcommerce merchants will also get access to PayPal's One Touch for Web and mobile, enabling shoppers to pay across more than 90,000 online stores in a single touch, without needing to enter user IDs or passwords after their first log-in.

PayPal's One Touch for Web will enable Bigcommerce merchants to pay across online stores with a single click. The newly released payment option will be made available to all Bigcommerce merchants in the United States in the coming weeks, with international rollout expected later this year.
Braintree, which supplies developers with its v.zero SDK, enables online businesses to process credit card payments by providing a merchant account, payment gateway, recurring billing and credit card storage, and secure data storage.

The joint integration gives Bigcommerce merchants a clear path to access the capabilities of PayPal and Braintree. Bigcommerce is a startup that's gaining market share very quickly, fueled by more than $75 million in venture capital.

--Easy-payment upgrade: PayPal also revealed the expansion of PayPal Credit products. In January, it launched Easy Payments, which shoppers use to divide larger purchases into manageable monthly installments. On May 21, additional merchants—including Shop.com—began offering Easy Payments, giving shoppers greater visibility into their finances and helping them better manage their budgets, Shulman said.

As for the PayPal roadmap for the rest of 2015 and into 2016, Shulman said he sees mobile payments becoming a steadily increasing section of the business. Payments on mobile devices currently comprise only about 25 percent of the company's 4 billion annual transactions.

Other metrics: PayPal has 165 million users, with about 60 million in the U.S. PayPal's payments volume hit $46 billion, up 68 percent year-over-year, in fiscal year 2014.

Although e-commerce seems to be everywhere, it still only comprises about 10 percent of the estimated $25 trillion global commerce total, so there's plenty of fertile ground for marketers to plow.

As for the idea of PayPal becoming a "digital commerce operating system" provider, SVP Global Head of Merchant and NextGen Commerce Bill Ready wrote in his blog that "although many businesses are entering the payments space, PayPal is in a unique position in that it's not just a payment platform, a gateway, a merchant account, a payment method, a digital wallet, a payment processor, a peer-to-peer solution and a provider of credit to both consumers and merchants."

"It's every single one of these things, integrated end-to-end in a way that delivers more seamless commerce in a hyper-connected world," Ready wrote.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...