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Comment by froo | Hacker News Reader

When you consider that estimated North American internet usage makes up less than 20% of total internet usage[1], I don't think PayPal has anything to worry about for a long time.

They are the almost defacto standard for personal payments online will keep them in the top spot for a long time due to network effects. Without a serious shift in usage, its hard to see that changing any time soon.

As an anecdote, my grandmother passed away last week. Her 86 year old sister back in Germany asked us if we had PayPal this week so she could send flowers for her funeral. It may not be a "hot" company in the US, but its still highly relevant to the vast majority of internet users, even ones that are only just venturing onto the web.

[1] I don't know the actual number as everywhere I've looked suggests between 13% and 15%. I figure less than 20% is a safe bet.

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"PayPal has [nothing] to worry about for a long time."

I'd be careful, sometimes these articles are alarmist and over-reacting but a lot of times they predict the downfall of companies years ahead of their demise. Digg, Palm, Kodak, Yahoo, etc... A lot of these companies all display similar patterns right before things start to get bad for them. They stop innovating, they start getting surrounded by competitors, they get too comfortable thinking they're "too big to fail" and have the "network effect".

Look at Palm alone, it was a leader in PDAs and in a few short years it was gone. The internet and technology are changing at extremely fast speeds. One year you're safe, the next year a competitor has taken your market share. It all happens so fast now. Easier to start, easier to implement, easier to set up, and little by little it's no longer hard for your client to switch payment systems.

Digg, Palm, Kodak and Yahoo are poor analogies to PayPal. None of those companies had positions which were defensible against a better technology. PayPal does.

PayPal's barrier to competition isn't technology. It isn't service. It's not network effects.

It's that they've done the infinitely tedious schlep of jumping through thousands and thousands of hoops all over the world to make it possible for me, an Australian, to do business with a person in the UK in USD if that's what I require.

Nobody else can do that unless I arrive with millions of dollars in tow. Nobody else comes close.

I desperately want that to change.

Being accepted internationally is not a proprietary technology. It's not something that ONLY PayPal can do. It happens to be something ONLY PayPal does at this moment. But honestly, give Square or Dwolla 7 years and they'll jump on the international bandwagon as well. The benefits are too numerous for anyone in that space to ignore international payments.

Also, BitCoin. I wouldn't even consider it an option for myself for so many reasons but BitCoin is truly international and the only thing that comes close to PayPal at the moment. I'd rather not have to ask the other party to spend 6 and a half hours reading and understand exactly what bitcoin is, how it works, and weather or not they can trust it. Then spending 7 days moving money from Bank Accounts to Dwolla to MtGox. But it is an option. Especially for large sums of money IF it's from people you trust and IF they know how bitcoin works. But that's too many ifs.

That's not really an insurmountable barrier.

Once someone wins the US market, they'll use their treasure trove to enter other markers and then in a few short years we'll see paypal vanish.

Once someone wins the US market, they'll use their treasure trove to enter other markets

Sorry, reality disagrees.

Hardly any of the american Paypal-competitors give a flying fuck about the rest of the world. And many of them have been around for the better part of a decade.

The would-be gorillas 'Amazon Payments' and 'Google Merchant' are US-only and US/UK respectively.

Notice I said "won" the US market.

Paypal is still completely dominant in the US. Amazon Payments? Google Wallet? They're no where near even proving better than Paypal in local competition.

So you're a startup and your model or base is international — and all you need to do is wait a "few years".

If your model and base are international, you're overreaching.

All startups have to start small and evolve from there. Once you prove your ideas in one market, its easier to duplicate your success in others.

I would not advice a startup to take a lot of funding, then attack the international market initially.

That kind of pre-mature scaling is reminiscent of Webvan.

International might include not in the US.

I presumed you meant international as in more than their home-base nation whatever it may be.

I think it's possible to start a Paypal competitor for just Germany, then grow from there.

But it'd be far more difficult to start a Paypal competitor that targets all of the EU.

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