Paypal Beware: MasterCard is Determined to Capture Market Share

Jun 08

MikeWeb Industry mastercard, moneysend, paypal No Comments

Until now, Paypal has held the market share when it comes to financial transactions using online and mobile platforms.  Recently, MasterCard released the Moneysend app that enables iPhone and iPad users to transfer money to other accounts quickly and easily.  Powered in part by Obopay, users can send and request money through banks and credit unions using the free app with either an existing MasterCard or bank account.

MasterCard is determined to take Paypal on; they have also announced a plan to open up its’ payment gateways to developers who want to build and enhance the online platform and mobile apps.  (As you may know, Paypal released their API Paypal X at the end of 2009.)

So what are the benefits of this new app?  I’m not sure if it’s a benefit but unlike Paypal, users of MoneySend will incur a transaction fee at the front end (sending the money) while the recipients won’t be charged a fee.  (Paypal recipients incur the transaction fee, if any.)  And security?  It’s always a concern when it comes to the storing of financial information via electronic devices such as phones.  But MasterCard have made moves to assure users of the app that it is secure and that all personal and financial information will not be stored locally on the iPhone or iPad.

Since eBay purchased Paypal, all traders are required to have a Paypal account in order to sell through via eBay.  This in itself may be the biggest factor in the success of the Paypal app and most likely the reason MasterCard will struggle to convert users – especially as MoneySend charges to send payments unlike Paypal.

Paypal is a giant – there’s no argument there.  MoneySend is the first app to be released by another major financial-focused company but so far it’s slow to gain traction and is currently only available in the US.   I respect the ambition MasterCard has; they have clearly spent time and resources developing the MoneySend app in a bid to lure users away from Paypal.  Truth is, Paypal has a strong brand and very wide appeal, something which could be tough to beat – even if your name is MasterCard.  Only time will tell…