Using PayPal Once a Quarter
How many customers does PayPal have, and how often do they use the service? How does this compare to a big bank? An article on PayPal’s Nebraska operations centre provides some interesting insight into the use of PayPal:
As of March, PayPal had 143 million accounts, yet handled only 177 million transactions in the first quarter (averaging approximately $64.18 per transaction). That works out to not quite 1.25 transactions per quarter per account. Compare that to Bank of America with 55 million consumer and small business “relationships” (Source: Bank of America 2006 Annual Report) and what we can assume are a whole lot more transactions per customer per quarter (for example they made over $5 billion in service charges alone vs. overall annual PayPal revenue of somewhere near $1.7 billion.
The comparisons may not be fair (PayPal relies on the payment platforms such as credit cards and EFT/ACH provided and/or supported by banks), but clearly PayPal customers, an impressive number, don’t really use the service that much. In my own ad-hoq, completely unscientific survey, I have found the following statement often resonates: “I have a PayPal account, but the last time I used it was 6 months ago for something on eBay”. How does PayPal break out of this and get their rather impressive number of customers making more transactions?
