PayPal Should Go Social

14 Dec

PayPal LogoPayPal, the electronic payment program launched to prominence by eBay, should join the social networking bandwagon and create social applications for LinkedIn and Facebook. While other stalwarts of “Web 1.0,” such as eBay and Skype, have launched into this space, PayPal has inexplicably lagged behind.

My friend Tony and I were discussing this idea yesterday as we tried to finally sort out payment from a recent trip we took together to Spain. We had a few ideas about how a social application could add real value for the company:

  • Build Awareness: PayPal already has good penetration and is clearly the market leader in the US for electronic money transfer. It is not, however, universally understood or used. Trying to arrange payments for a company ski trip recently I discovered that more than half of my colleagues had never used the program. Facebook badges and notifications about friends adding the new application would surely help further build brand awareness for their service, and attract more users.
  • Find Fellow Users More Easily: Similar to Skype’s Facebook application, PayPal could help users of the application to more easily identify which of their friends also use PayPal to make it easier to determine the easiest way to send payments to them

But with an ounce of innovation, combined with a new social platform, PayPal could start to offer some truly interesting services.

  • Collaborative Accounts: Allow multiple users to create a common account linked to each of their individual accounts for making payments and managing cashflows relevant to all of them. This would have been perfect for organizing the company ski trip, as it would have both allowed users to easily add money into the account, it would allow a small group of “Administrators” to make payments out of it and to the various vendors that needed payment (lodging, lift tickets, shuttle services, etc). Everyone would be able to see how much money is in the account, and how it’s being spent. Its transparency and paper trail would largely eliminate the need for a single person to be the “Treasurer.”
  • Pay Backs: So you and your friends went camping this weekend. Two bought $40 worth of groceries each, one bought $200 in alcohol, and your other three friends, well, they ate and drank. How are you going to work out repayment? A newly social PayPal could help friends solve this dilemma, allowing multiple users to add money to a common account (called, perhaps, “BoozeCamp”) which would then be repaid evenly to all members. A little creativity on how to allow people to add non-cash value (receipts) to represent their contributions, and you’d be set
  • Communal Payments: You have three roommates, and a landlord who insists on receiving only one check each month for rent. Or perhaps, you and your friends want to chip in to help out your friend who hosted a great party, or who paid for a birthday present from “everyone.” Basically just a slight modification on the above ideas, PayPal could create an easy system for making payments together, by aggregating funds from multiple users, and allowing everyone to see who has paid, and who hasn’t

Any of these innovations could add new uses to the stagnating PayPal platform (who, by the way, could still use a user-interface makeover while they are at it – even after they prettied-up their front page), and help combat new entrants. There could be some tough legal issues to overcome regarding money laundering, but I imagine there could be some balance struck between putting maximum fund-limit caps on accounts while still allowing 90% of legal uses.

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