Theodor Weimer, the management board spokesperson of Bavarian bank HypoVereinsbank, clearly identified the enemy at a meeting in Frankfurt recently. “The real battle will not be fought between the banks,” said Mr. Weimer. “The danger is the non- banks and near-banks.”
He specifically named PayPal in his remarks, but he might well have been referring to the rapidly growing numbers of new service providers such as Apple Pay, Google Wallet or Yapital.
While banks understand the threat these new services pose, the industry has not reacted with any cohesive strategy for meeting the challenge. PayPal has long outperformed them in online trading. If the banks don’t change their thinking and soon, the same will happen to them with mobile payments.
The fact that PayPal is breaking loose from Ebay and plans to go public is the final wakeup call for banks. Once PayPal is independent of the online auction house, it will be much more flexible, since Ebay was an impediment to its growth. Some online shops, including Amazon, refused to integrate PayPal as a method of payment because of its connection to Ebay.