ECB tries to empower banks to fight PayPal
The European Central Bank (or ECB) recently unveiled a new platform designed to help banks across Europe to better compete with PayPal (PYPL), Reuters reported. The platform, known as TARGET Instant Payment Settlement (or TIPS), allows banks to process payment transactions in seconds. TIPS will initially settle transactions in euros only, but support for other currencies may be added in the future if there is demand.
According to the report, foreign companies such as PayPal, Google (GOOGL), Amazon (AMZN), Alibaba (BABA), and Tencent (TCEHY) currently dominate the digital payments market in Europe. Google runs a mobile payment service called Google Pay, which has launched in several countries. Amazon runs a digital payment service called Amazon Pay, which mostly serves its online marketplace by processing payments for sellers and shoppers. Alibaba and Tencent have dominated the Chinese mobile payments market with their Alipay and WeChat Pay services, respectively, and are expanding overseas.
PayPal sees collaboration opportunity
What’s next for PayPal with the arrival of TIPS in Europe? A PayPal spokesman told Reuters that the company welcomes TIPS, and that it sees more collaboration across the payments industry with the launch of the new pan-European payments platform. The Reuters report also noted that ECB’s previous attempts to challenge PayPal have not always gone well.
PayPal processed $143 billion in transactions
PayPal handled transactions worth $143 billion across its various platforms in the third quarter, representing an increase of 24% year-over-year.