I have utmost respect for Paypal.  It has challenged the payment network monoliths, V and MA. It has already more than 110m customers from all over the world.  In the consumer studies, Paypal has been voted the most-trusted company to provide a mobile-wallet solution – higher than the banks!  It has processed over $125b of payments worldwide in the last 12 months. Some even consider Paypal as the best tech acquisition  with a $1.5b all-stock-no-cash acquisition in 2002 resulting  in a cumulative $20b revenue till date.

I was talking to one of the professors in UC Berkeley last week and we stumbled upon a very interesting conversation with some basic questions – why should a consumer use Paypal? why can’t one just continue to use a visa card? does one get any additional benefits?

As a payment technology enthusiast, I started responding to those questions – safety, convenience, ability to use one password and pay with any debit/credit/bank account, p2p transfers, access to history of transactions, mobile payments, empty hands, etc.  When I was enumerating all these benefits, I was interrupted by the professor and was told that he just cannot “connect” with Paypal like the way he connects with a Visa/Mastercard/Amex card.  And believe me, I have heard that from a few others in the last few years.

If the consumers need to change their behavior, they need to be incenti.. hmmm..  bribed. Yes, let us not be beating around the bush. No tangible benefits, and no motivation to change! So, what are the real, world shattering benefits that consumers get by using Paypal in retail ? Safety, Convenience, Alternative to another card, access to history – well, u got it right.. none of the above and not even close! Can this pal  (Paypal ) get some good deals? Can it save some money? Can it suggest the best payment instrument to be used in a certain situation? Can it suggest the price history for a product in the wishlist and alert the user to buy at trigger points? Can it make “life” easier, better or longer and not just the “payments”?

Visa drives the brand of universal currency of life. Over the years, they have built an emotional connection. Emotional connections of peace of mind, control, freedom and empowerment. A logical connection of acceptance, security, value and convenience.

Paypal – are you up to that?