PayPal and eBay see increase in profits

Increase in profits

On the back of impressive growth at PayPal, online auction site eBay has reported a massive 26 percent rise in net income for Q2.

Net income for the group totalled $412 million up from $327 million for the same period the year before. Net revenue was $2.22 billion, a six percent increase from 2009's $2.10 billion. The increase beat Wall Street predictions and is confirmation of the non-stop rise of PayPal, which saw revenue up an impressive 22 percent to $817 million for the quarter.

PayPal's success

The payment service has seen a million new accounts each month over the quarter and as a result, has seen its merchant services business grow by 40 percent year over year for three consecutive quarters.

Speaking of the figures, John Donahoe, President and CEO of eBay, said: "PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of e-commerce."

He added that the success of PayPal has helped to compensate for the "slower than expected" growth of eBay's US business, which is undergoing a "turnaround" plan.

A threat to eBay?

While eBay may be dominating now, there are reports of threats on the horizon. One of which is WePay.

In essence, the WePay platform can be used by any group of numerous people wanting to jointly access a pool of capital and lets the group create accounts, produce invoices, collect money, manage transactions and make easily-monitored payments.

"WePay is a lot easier to use than PayPal, especially when you're trying to collect money from a lot of different people," says WePay co-founder Rich Aberman. "But the real difference between WePay and PayPal is that WePay allows users to create separate accounts for different things - like an account for your roommates and a totally separate one for a group vacation."

"WePay has made the collection and payment process stress free for everyone involved," said one user. "I'm able to quickly send 'bills' to my teammates and I'm notified when they submit payment. My favourite part is that WePay sends reminders directly to teammates with a balance due. This eliminates the discomfort of having to remind friends that they owe me money."

Only time will tell if WePay has the legs that eBay has had.

Relevant articles:

WePay, a legit threat to PayPal | Mobile Express Checkout launched | US Bank to offer P2P payments via CashEdge

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