eBay has decided to part its ways with PayPal. Alibaba Group Holding Ltd (NYSE:BABA), the e-commerce juggernaut which recently started its operation inside the US with record setting IPO has already hinted that it is open to work with PayPal. Alibaba Group Holding Ltd (NYSE:BABA) recorded transactions of around $9.3 billion on Chinese Single’s Day, breaking the last year’s record of 36 Billion Yuan. The company is open to let its users pay via Paypal where its own payment system Alipay is not accepted. PayPal seems to be the right choice for Alibaba.
Perhaps the biggest challenge for Alibaba Group Holding Ltd (NYSE:BABA) regarding its payment method is the lack of acceptance. Alipay cannot reach near to the customer base which is owned by PayPal. PayPal is being used by billions around the world. Alibaba Group Holding Ltd (NYSE:BABA) can make use of this customer base and expand it in the US. After the split from eBay, PayPal will be valued at around $47 billion.
PayPal processes 10 million payments daily. The company has more than 157 million open digital wallets, allowing the customers to get paid in more than 100 currencies. Alibaba Group Holding Ltd (NYSE:BABA) payment method is not even close to the volume of PayPal. On the other hand, joining hands with Alibaba Group Holding Ltd (NYSE:BABA) will let PayPal penetrate in the emerging markets, making China as its launch pad. Alibaba Group Holding Ltd (NYSE:BABA) also has plans to integrate its payment method with Chinese phones. This will give PayPal an option to enter phones market and compete with Apple Pay. According to a survey, mobile payments in the US will reach a total of around $118 billion in 2018. Alibaba Group Holding Ltd (NYSE:BABA) and PayPal can make the best use of this market teeming with opportunities.
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