Research Paper

2010 - 2011

Group 17

Foreign Language Faculty Banking University of Ho Chi Minh City

A researcher paper submitted in partial fulfillment of the requirements for the Writing Research Paper course in the second semester of 2010 - 2011 Submitted by Group 17: 1. Vũ Thị Thu Hà 2. Nguyễn Kim Hằng 3. Nguyễn Đỗ Ngọc Huyền Due Date: May 26th 2011 Instructor Ms. Phan Thị Lệ Hoa

Title :A

Foothold Into Asian Market – PayPal Serves As A Great Electronic Alternative For Traditional Methods

[A FOOTHOLD INTO ASIAN MARKET – PAYPAL SERVES AS A GREAT ELECTRONIC ALTERNATIVE FOR TRADITIONAL METHODS]

2010 - 2011

ACKNOWLEDGEMENT Even though the researchers tried their best to carry out this study, it cannot be completed without the encouragement and help form their instructor, their friends and their family. Firstly, the researchers would like to send their sincere thanks to the instructor, Ms. Phan, for her careful instructions and useful advice. We are very grateful for the time you have spent for this research paper to be completed. Besides, the researchers really appreciate their family for the moral and physical supports they were given. Last but not least, the researchers would like to thank Banking University of Ho Chi Minh city sophomores of Foreign Language Department for their enthusiastic helps and encouragement during the process of conducting this study.

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ABSTRACT This research paper consists of four chapters which help readers have a deeper insight into PayPal-a safer, more convenient, time-saving service of online payment for customers in Asian market generally and Vietnamese market particularly. The researchers will give a brief description of PayPal’s foundation, detailed information about the transactions with its service and the popularity of PayPal in Asian as well as its strategies in Vietnamese market. Chapter one is the introduction of the research paper. It contained the background to the study, the rationale and the objectives to carry out this research. The scope, limitation and assumption were also presented apparently in this first chapter. The second chapter is the literature review. It is the part summarizing and shortly discussing on testimonials from trustworthy writers, famous experts and experienced businessmen. These quotations gave a brief overview of PayPal’s foundation since 2002 along with its development throughout the time. In the next chapter, namely data analyses and discussion, the researchers analyzed and discussed the data collected from online journals, articles and testimonials as well. Finally is the conclusion of the research paper/the study where readers can find a review of what has been mentioned in the previous chapters. Besides, the researcher also stated the limitation of their study and predictions of PayPal’s development as well as the appearance of new online payment method in the future.

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TABLE OF CONTENTS: ACKNOWLEDGEMENT ................................................................................................................. 2 ABSTRACT ..................................................................................................................................... 3 TABLE OF CONTENTS: ................................................................................................................. 4 CHAPTER 1:

INTRODUCTION...................................................................................................... 5

1.1.

Background ....................................................................................................................... 5

1.2.

Rationale ........................................................................................................................... 5

1.3.

Objectives .......................................................................................................................... 5

1.4.

Scope ................................................................................................................................. 6

1.5.

Limitations ........................................................................................................................ 6

1.6.

Assumptions ...................................................................................................................... 6

CHAPTER 2: 2.1.

LITERATURE REVIEW ........................................................................................... 7

PayPal’s business model and its development..................................................................... 7

2.1.1

Brief history of PayPal Inc. ........................................................................................ 7

2.1.2

PayPal’s business model –their method of earning money .......................................... 8

2.2.

The transaction procedure when using PayPal and its special features .............................. 10

2.2.1

Steps to do transaction with PayPal .......................................................................... 10

2.2.2

PayPal’s values above other online transaction channels ........................................... 12

2.3.

PayPal’s strategies to enter Asian market generally and Vietnamese market in particular.. 16

2.3.1

Position of PayPal and its strategy in Asian market ................................................... 16

2.3.2

PayPal’s foothold into Vietnamese market ................................................................ 19

CHAPTER 3:

DATA ANALYSIS AND DISCUSSION ................................................................. 21

3.1.

The popularity of PayPal all over the world and its impact ............................................... 21

3.2.

The success of PayPal in dealing with troubles with customers......................................... 21

3.3.

The start of PayPalin Vietnamese market ......................................................................... 22

CHAPTER 4:

CONCLUSION ........................................................................................................ 23

REFERENCES ............................................................................................................................... 25

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[A FOOTHOLD INTO ASIAN MARKET – PAYPAL SERVES AS A GREAT ELECTRONIC ALTERNATIVE FOR TRADITIONAL METHODS]

CHAPTER 1:

2010 - 2011

INTRODUCTION

1.1. Background In recent years, the development of technology has led to a significant boost of online shopping. According to the U.S Census Bureau, in 2008, E-retailing activities covered nearly half of the total retailing and food services. With this large number of daily transactions, how could the customers be sure about their money? Is it really safe to directly give the producers their own credit card information? Is it convenient for the producer to receive transaction from different banks or different customers? For a majority of people, the answer is no. As a result, PayPal Inc® was founded to satisfy customers’ and also producers’ needs. Until now, PayPal has become the most popular online transactions channel throughout the world. However, it seems to be a very new concept to Vietnamese people. 1.2. Rationale It is the purpose of this research to provide detailed information about PayPal-a safer, more convenient, time-saving service for customers in Asian market generally and Vietnamese market particularly. Together with PayPal’s safe and convenient payment method, this paper also provides a whole picture of PayPal’s activities in Asian countries such as China, Hong Kong, Japan and so on. This can also help review the situation in Vietnamese Market and give a deep understanding about PayPal to potential Vietnamese customers who still have no experience in using its services. 1.3. Objectives This reading report will present several issues on PayPal. It will provide general information about PayPal’s business model and its development. More importantly, readers will understand deeply about the transaction procedure Page | 5

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when using PayPal and its features. Then, the strategies which PayPal uses to enter Asian market generally and in Vietnamese market in particular will be investigated. 1.4. Scope Under the scope of this paper, the researchers will not mention the foundation of PayPal in detail because a detailed History of PayPal was reported in a Wikipedia Article. Moreover, the target is about PayPal’s business activities in Asian market. As a result, researchers only consider its payment method, the transactions with its service and its strategies, particularly in Asian region and in Vietnam. 1.5. Limitations Despite lacking of experience in using PayPal’s services before, the researchers can still identify the key factors for the research throughout mainstream newspapers and trusted reference websites. In addition, Vietnamese customers have not been accustomed to this new kind of payment method because of information shortage and limited credit card usage. These could lead to the toughness of writing this paper but writers do prepare resources carefully and have some statistics as an analysis for the unpopularity of PayPal in Vietnam. 1.6. Assumptions As a matter of fact, PayPal is not well-known in Vietnam due to the economic environment, the slow development of online transactions and barriers of Vietnamese culture. However, PayPal will hopefully continue to expand in Vietnam and this will accordingly lead to some changes to the Vietnamese Market. Besides, those changes will not only bring many benefits to domestic customers but also to foreign businesses. Page | 6

[A FOOTHOLD INTO ASIAN MARKET – PAYPAL SERVES AS A GREAT ELECTRONIC ALTERNATIVE FOR TRADITIONAL METHODS]

CHAPTER 2:

2010 - 2011

LITERATURE REVIEW

2.1. PayPal’s business model and its development 2.1.1 Brief history of PayPal Inc. Nowadays, with more than 190 markets and 24 currencies available, PayPal is a well-known marketplace for payment transactions. However, PayPal itself cannot be only formed within one night. It has a history of more than 10 years, since the day it was born in late 1999 – early 2000. Along this 10 year-history, year 2002 was a very important milestone with both PayPal and eBay when eBay acquired PayPal for $1.5 million (eBay buys PayPal for $1.5 million, 2008.CNN

News.

Retrieved

April

10th,

2011,

from

http://archives.cnn.com/2002/BUSINESS/07/08/ebay.paypal /). According to one article at that time (Margaret Kane (2008, July). eBay picks up

PayPal

for

$1.5

million.

Retrieved

April

9th,

2011,

from

http://news.cnet.com/2100-1017-941964.html), eBay decided to use PayPal as its officially electronic payment system because they saw that PayPal was a large and potential company in online payment market in which non-credit-card method was used. By buying PayPal, eBay could increase significantly the number of electronic payments and made people feel more comfortable when they did not need to provide their credit card information. For PayPal, it was both a chance and a challenge. It was a chance because “eBay and PayPal have built vibrant user networks on the Internet”, as PayPal CEO Peter Thiel said in a statement. This obviously would provide PayPal to extend its own communities and to offer a brand new buying tool for PayPal’s customers: eBay! However, PayPal also faced problems with lawsuits from customers who said that the company illegally froze their accounts (Troy Page | 7

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Wolverton (2002, June). PayPal investors file to sell shares. Retrieved, April 10th,

2011,

from

http://news.cnet.com/2100-1017-

935360.html?tag=mncol;txt/).This could result in bad relationship of customers with eBay and PayPal. After the acquisition, eBay and PayPal has managed to grow bigger and bigger. At present, PayPal particularly in US region is becoming a popular choice among people. It is said that Dell Computer Company had added a new service which help customer purchase their products with a PayPal account (Credit cards lose ground to PayPal. BusinessWeek.Retrieved April 9th, 2011, from http://articles.moneycentral.msn.com/Banking/FinancialPrivacy/CreditCardsLo seGroundToPayPal.aspx/). Moreover, as a statistic showed (Credit cards lose ground

to

PayPal.

BusinessWeek.Retrieved

April

9th,

2011,

from

http://articles.moneycentral.msn.com/Banking/FinancialPrivacy/CreditCardsLo seGroundToPayPal.aspx),

PayPal and other non-credit-card electronic-

payments processors have grabbed more than 30% of the U.S. online payments market, though PayPal is the leader, making up roughly 24% of the market. 30% was still not the majority but it was 3 years ago. Recently, in the year 2008, PayPal celebrated its 10th birthday (History of PayPal. Retrieved April 11th, 2011, from https://www.paypal-apac.com/sg/about-paypal/history-ofpaypal.aspx/). 2.1.2 PayPal’s business model –their method of earning money Talking about the appearance of PayPal, Douglas MacMillan and Joseph Galante stated that PayPal had played the role of an “alternative payments transactions not done with cash, check or credit cards”, (BusinessWeek.com; 2/10/2011, p3-3, 1p). PayPal’s business is to offer customers a much more convenient way for their payments as said Melissa Raissa, “With your PayPal Page | 8

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account, you can buy items from online stores, receive money for goods or services, or even donate to charities in just a few clicks”, (How to use PayPalwithout a credit card, 2009). In order to avoid fraud and hacking when using the credit card for making payments, it is approved that PayPal users can be guaranteed about their information. According to Burrows (/eBay’s big plan for PayPal, 2009, p.2), customers can pay for products online without having to provide their credit card information each time. Users will be asked to open a PayPal account or they can have their credit cards, debit cards linked to PayPal service. In 2009, “the move comes as eBay is struggling mightily in its traditional electronic commerce business” (Business Week Online, 2009, p.2). Customers shifted towards more convenient fixed price purchases. Therefore, eBay had to plan a new strategy for the expansion of PayPal. The company started to push the use of PayPal account in Mobile application as much as Apple, Google or other rivals. It encouraged customers to use PayPal by introducing its own software developers as Stephenson said, "A software developers' kit is being created" (as cited in Burrows, 2009, p.2). In the marketplace, PayPal had helped revive growth of eBay against Google, Apple. "The eBay business is structurally far more profitable," said Stalder (as cited in MacMillan, Douglas & Galante, Joseph, 2011, p.3). It continued to create loyalty to the PayPal brand and tried to deal with problems of customers.

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2.2. The transaction procedure when using PayPal and its special features 2.2.1 Steps to do transaction with PayPal PayPal is an online payment service that allows individuals and businesses to transfer funds electronically. In this article, the researchers will investigate some problems with PayPal and how the transactions are made throughout the world. Besides, they will have a look at special features of PayPal in general. “PayPal is the leading alternative online to traditional payment methods. Instead of sending paper checks or using credit/debit cards, many people prefer to electronically transfer funds via PayPal for a wide variety of business transactions.”(Robin Noelle, eHow Contributor. PayPalProcedures. Retrieved from http://www.ehow.com/way_5449481_paypal-procedures.html). Providing clients with four steps, PayPal’s transaction procedure has simplified their way to reach extensive support from customers all over the world. It’s easy to set up aPayPal’s account by visiting the website www.paypal.com and clicking the "Sign Up" button. Clients can only have account within their country, though PayPal’s available all over the world. During the registration, they have to fulfill the information about their addresses, bank accounts, etc. and all of them must be accurate in order to ensure the security. To confirm the personal information and verify PayPal account, clients will follow the instructions that appear and link it to their bank account. Two small deposits are first made by PayPal and client’s duty is to sign in then provide the right number requested as an evidence of ownership. Following the “Make a Payment” which links to the website’s orders, customers will have to take some actions to do transaction with partners. Those include the email address of the beneficiary, the amount of money and the Page | 10

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customer’s source of funds. On some online shops, the button “PayPal” has been already added for the customers to link into transaction page conveniently. With PayPal, all the online business transactions become more swiftly and effectively than ever before. When receiving money from the others through PayPal channel. The amount will be added up to receiver’s PayPal account and they can get that money by transferring indirectly into their bank account. It’s usually unsecured when using regular credit cards/debit cards so making transaction through PayPal system is a wonderful utilization. When accepting payments via PayPal, PayPal takes a percentage as commission of the amount clients are paid and this fee usually ranges between1.9% to 3.9%. To small payment, it’s free in most cases when using PayPal in almost United States. If the amount of money comes from PayPal balance or bank account, PayPal will charge no fee. “PayPal doesn't fundamentally change the way merchants interact with banks and credit card companies. It just acts as a middleman” (N-CAP User’s guide, Everything you need to know about using the internet-How PayPal works, p.7). Nevertheless, in case the sender uses a credit/debit card/PayPal Credit to pay the amount or for the transactions which involve payments for goods or service, there will be a fee associated with the payment. This fee amount can be paid by either the sender or the receiver. They can reach an agreement about the final payer. The Security Center or Help menu is always available for clients to raise complaints if necessary (problem with receiving the product or service paid for or error in charges).

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2.2.2 PayPal’s values above other online transaction channels 2.2.2.1 Good securities measures Along with the development, PayPal has gained a great trust from the customers all over the world. Yet, it also faces with many problems which cause barriers between the company and customers. As Tom Mainelli wrote in PayPal’s problems (McLeod, Ramon G., PC World, 07378939, July 2002, Vol. 20, Issue 7) “If you're among the roughly 16 million people signed up to use PayPal, you know how handy the online payment service can be, and chances are, you've never had a problem”, PayPal has been approved its ability to guarantee the safety and privacy of customers’ transactions and financial information. Firstly, they make buyers feel more secure and confident when making payments online by not sharing buyers’ information with sellers. Next, fraudulent transactions will be detected and predicted. Moreover, PayPal requires patent-pending verification which bank account verification is considered as an additional level of authentication. Lastly, their anti-fraud team work behind the scenes to monitor activity and use proprietary fraud risk models for industry-leading network security. These measures help you quickly pay for goods or services by having money transferred from your credit card account, bank account or PayPal account without worrying about the security of your money (Reid Goldsborough, PayPal's Growth Creates Complaints and Controversy, Community College Week mm.cmeek.com, February 22, 2010). PayPal can maintain their customers’ loyalty by not only its security system but also its ability and response to customers’ problems. Most complaints are resolved within 24 hours, said Vincent Sollitto, vice president of corporate communications (Mainelli, Tom & McLeod, Ramon G., PayPal’s problems, PC World, 07378939, Jul2002, Vol. 20, Issue 7). For example, Erskine Hawkins Page | 12

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III, Grand Prairie, TX claimed PayPal for not refunding him the total amount he had paid for a keyboard which he did not get. “PayPal offered two levels of buyer protection. Purchases from high-volume, highly reviewed sellers were guaranteed up to $2,000. All others were only covered up to $200” (PayPal Payback, Good Housekeeping, 0017209X, Feb2009, Vol. 248, Issue 2). Finally, he got all his money back. Another case in which PayPal did a good job in dealing with customers’ claim is when a customer’s account is frozen. Amanda Pires – PayPal spokesperson answered that "PayPal limits a member's access when there is unusual activity on the account. When an account has been limited, PayPal asks the member to follow a few steps to verify the account information. After that, access to the account should be restored, but occasionally PayPal requires additional steps, which is what happened to the customer, "We tell members that we need to review some Items and will get back to them," says Pires. "If account members have any questions during the process, we encourage them to e-mail or call us." (Aquino, Grace, Locked Out of a PayPal Account, PC World, 07378939, Sep2003, Vol. 21, Issue 9). Neil J. Rubenking, project leader for PC Magazine Labs also stated “PayPal verified that it never under any circumstances sends e-mail asking you to enter private information” (Rubenking, Neil J., Inside a "PayPal" Scam, PC Magazine, 08888507, Jul2003, Vol. 22, Issue 12). That is how PayPal detect fraudulent transactions and solve problems of PayPal users. From what it guaranteed and how it dealt with drawbacks, PayPal attracted more and more customers and it gradually replaced the ground of credit cards.

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2.2.2.2 Convenience in transaction management Another case in which PayPal did a good job in dealing with customers’ claim is when a customer’s account is frozen. Amanda Pires – PayPal spokesperson answered that "PayPal limits a member's access when there is unusual activity on the account. When an account has been limited, PayPal asks the member to follow a few steps to verify the account information. After that, access to the account should be restored, but occasionally PayPal requires additional steps, which is what happened to the customer, "We tell members that we need to review some Items and will get back to them," says Pires. "If account members have any questions during the process, we encourage them to e-mail or call us." (Aquino, Grace, Locked Out of a PayPal Account, PC World, 07378939, Sep2003, Vol. 21, Issue 9). Neil J. Rubenking, project leader for PC Magazine Labs also stated “PayPal verified that it never under any circumstances sends e-mail asking you to enter private information” (Rubenking, Neil J., Inside a "PayPal" Scam, PC Magazine, 08888507, Jul2003, Vol. 22, Issue 12). That is how PayPal detect fraudulent transactions and solve problems of PayPal users. From what it guaranteed and how it dealt with drawbacks, PayPal attracted more and more customers and it gradually replaced the ground of credit cards. Being different from other online payment channel, PayPal allow customers to have the most interactive way when using the website as well as making payment. With the inter-face theme, it has satisfied almost every customer whenever scanning their space. Below are some advantages listed as the most common ones. 1. Easy to sign up and sign in:

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When doing business online, people are usually afraid of lengthy sign up process. With PayPal, it takes customers just a few minutes, then they can carry out their transactions very quickly. PayPal users do not need to enter their details every time they shop online in a store which can use PayPal account to pay. “The importance is the integration is not only quick but cost effective and then the case of PayPal could not have been any quicker and more cost-effective”, said John Faico, Director of ECommerce for MTV Networks. Moreover, without a detailed credit history, that person can still use credit cards to transact with PayPal. 2. Variety of payment method: •

Credit cards

•

Debit cards

•

Bank account

•

PayPal account, or a host of other payment methods available in the country of origin.

With a variety of payment method, such as credit cards, debit cards, bank account PayPal is making easier for its customers in doing transaction among each other. As JohnFaico also stated: “For company that looks for a cost-saving method, I think PayPal is a great choice of payment method”. 3. No hidden fees: Customers only need pay a small amount of money when they receive a payment. The merchant rate is added based on customer’s sales volume monthly. Moreover, PayPal also declares the fee for its services, says 1.1%+0.3AUD for each transaction. Page | 15

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4. Easy to manage: Another thing motivates people to choose PayPal is that they no longer have to wait for physical checks to be cleared. As a PayPal’s customer, one could also gain several advantages. A PayPal account may not be individual, it may belong to a company. As a result, the manager can operate his company transaction with PayPal in a more effectually and more simply way. There are different sub-tabs for customer to choose in the Profile sub-tab such as: Multi-User Access, API Access, Currency Balances, and so on so forth. With these, users can manage their transactions better. As a consequence, PayPal continues to be the most popular transfer money service for online transaction admitted by customers. There is no doubt about its outstanding steps within next decades. 2.3. PayPal’s strategies to enter Asian market generally and Vietnamese market in particular 2.3.1 Position of PayPal and its strategy in Asian market According to AsinaPornwasin, an economic analyst, PayPal is step by step expanding its value worldwide from US$60 billion to between $100 billion and 120$ billion in 2011. To achieve its goal, it plans to focus more on encouraging the growth of electronic commerce in the Asia-Pacific region, which is said to be the fastest growth market. Mario Shilliashki, general manager of PayPal Southeast Asia and India, said that “Currently PayPal has 70 million active accounts worldwide from its total Page | 16

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of 175 million accounts. Of the active accounts, around 12 million are in the region, generating around $4 billion of its online transaction value.”(Asina, P. (2009). PayPal to focus more on Asia-Pacific.The Nation. Retrieved June 19, 2009from http://www.nationmultimedia.com/2009/06/19/technology/technology_3010557 7.php) "Asia-Pacific is the fastest growth region for us. That growth is the key factor enabling us to achieve our 2011 target," said Shilliashki (Asina, P. (2009). PayPal to focus more on Asia- Pacific, The Nation. Retrieved June19,2009 from http://www.nationmultimedia.com/2009/06/19/technology/technology_3010557 7.php) In attempt to encourage the development of e-commerce and online transactions across the region, PayPal has decided to rocket Asian region’s total online shopping market value. In Thailand only, there are now around 15 million Internet users, of which around 40 per cent are involved in online shopping. In the pre-2011 period, PayPal also announced that it planned to double the number of staff in Asia Pacific from 1,000 currently to more than 2,000 by the end of the year. More than 100 new jobs were intended to be added at the international headquarters in Suntec City, since it represents all of the company’s business outside of the United States. While becoming more and more successful all over the world and having a long-term strategy in Asia market, PayPal International vice president Mathias Entenmann stated Page | 17

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“Wherever we see a difficult new market where our service is, to some extent, educational for a few years we keep the service for free to encourage people to not be scared of a charge. We are confident we will see the same result that we have seen in other markets” (Ebay launches PayPal in China with ChinaPay , November 7th, 2005, from Forbes.com- USA, http://www.forbes.com/feeds/afx/2005/07/11/afx2130856.html) Firstly, they expand their branches widely in Asian countries. New jobs will be located at all seven offices in the region including Australia, China, Hong Kong, India, Japan, Singapore and Taiwan. “For its Singapore business headquarters and

development center,

PayPal

will

be

recruiting

Singapore-based

professionals with expertise in technology, product development, infrastructure design, risk and engineering” (Robin,W.(2010). PayPal Wants To Go From 1000 To 2000 Employees In Asia – This Year. Retrieved March 17, 2010 from http://techcrunch.com/2010/03/17/paypal-asia/ ) In 2009, more than $6 billion of total payment figure (at spot rate) has been processed in Asia Pacific, an increase of 38 percent from 2008. Since its establishment in the region in 2006, the company has struck dozens of partnerships with Asian companies including the announcements with DBS, Singapore’s largest bank, and China UnionPay-China’s bank card association. Moreover, they care more about the services they offer customers and try to gain customers’ attention and loyalty. A new technology marking the PayPal’s development e-commerce ecosystem across Asia Pacific was the announcement that the PayPal mobile payment software development kit (SDK), which firstly supported iPhone app development, was made available in the second quarter of 2010 to developers in the region. By that way, developers can add a checkout button to accept mobile payments without the need to collect financial information from customers with just a few lines of code. (Wauters Robin, PayPal Wants To Go From 1000 To 2000 Employees In Asia – This Year, March 17, 2010,http://techcrunch.com/2010/03/17/paypal-asia/) Page | 18

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In Kuala Lumpur, Jan. 13, 2011, PayPal announced it would open a new regional customer support center in Malaysia and planned to hire over 300 employees over the next three years. PayPal's new facility will offer service and support for customers across Southeast Asia as well as provide operational support for PayPal's global payment service. "PayPal is an innovative leader in the global payments industry and we are proud to welcome them to Malaysia to create employment opportunities in the local ecommerce and financial services markets," said DatukBadlishamGhazali, CEO of Multimedia Development Corporation (MDeC)(PR Newswire, PayPal to Open Regional Customer Support Center in Malaysia. Retrieved Jan 1, 2011 fromhttp://en.prnasia.com/pr/2011/01/13/110007712.shtml

).PayPal

has

extended its coverage in Asia by mass of strategic plans and new set up in different regions. By the way they do business, PayPal proves their number one position in Asian market based on number of customers satisfying with services they provide 2.3.2 PayPal’s foothold into Vietnamese market In recent years, together with expanding existing payment system in some Asian countries’ such as China, Hong Kong, Japan and so on, PayPal has been drawing their attention to Vietnamese Market. Different to their starting strategy which they used for going into Chinese Market, PayPal looked for a local partner. While in China, eBay first introduced its own brand in December 2006 but failed after several months, in Vietnam, they teamed up with Chodientu.vn – the Hanoi online auctioneer. According to an article on Businnessweek, on June 17, 2008, a signing ceremony was hold to link eBayPayPal with chodientu.vn (Businessweek. Retrieved May 5 2011 from http://www.businessweek.com/globalbiz/content/jun2008/gb20080617_221923. Page | 19

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htm?campaign_id=rss_as). This step is a wise decision for PayPal because the company used Vietnamese local brand instead of eBay own one. eBay-PayPal had learned from its own experience in China market, when they could not compete with local auctioneer -Taobao and after that had to link with ChinaPay. Moreover, as an article explained, chodientu.vn has its own online payment platform-nganluong.vn, which only appeared on market for a short of time (Retrieved May 5 2011 from http://jasonlog.supersized.org/archives/139PayPal-to-enter-Vietnam-market.html). That is why, if PayPal can link with Vietnamese Local Market like Chodientu.vn, the company can attract customers to pick its own service, it can provide a fast method for paying. One of the biggest difficulties for PayPal in Vietnam is to face fraud and counterfeiting. Vietnamese hackers, who are very active worldwide themselves can find the PayPal system on Chodientu.vn a good choice to try on. However, the chief executive officer of Peacesoft - which has provided the software for chodientu.vn mentioned that the largest fraudulent transaction was just $1,200, which was not so significant until this moment. With the appearance of PayPal in Vietnamese Local Market, it will contribute a lot to the development of ecommerce in Vietnam.

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CHAPTER 3:

2010 - 2011

DATA ANALYSIS AND DISCUSSION

3.1. The popularity of PayPal all over the world and its impact Since founded in 1998 and acquired by eBay in 2002, PayPal has developed from small areas to overseas, dealt with a lot of troubles and become successful over other rivals in this industry. PayPal has soon become the market leader while it grabbed more than 30% of the U.S online payments market. Besides, it was extremely successful in attracting customers’ attention and meeting their needs. For those reasons, PayPal has been more and more popular and considered as the best choice for customers all over the world. PayPal has offered more than 153 million accounts worldwide. Available in 190 markets and 23 currencies around the world, PayPal enables global e-commerce by making payments possible across different locations, currencies, and languages. 3.2. The success of PayPal in dealing with troubles with customers As mentioned in the literature review, there were so many problems which had happened to PayPal’s customers that could have led the company to bad reputation. However, with quick responses to the complaints, good customer services and the awareness of updating and varying services seemingly helped the company to maintain its prestige over the customers. Their methods of solving customers’ drawbacks are keeping every problem transparent to the public while saving private information for their customers. You can find a lot of complaints, both positive and negative feedbacks on the company’s customer services’ website. That is the way they contact and resolve each transaction. Therefore, after complaining about PayPal’s services, almost customer feel satisfied with the company’s solution and their money is in safety.

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3.3. The start of PayPalin Vietnamese market There are some obvious reasons why PayPal has not been popular in Vietnam. Through some studies, researchers assumed that there were both opportunities and challenges for PayPal and Vietnamese economy. Firstly, the internet system in Vietnam is not really good. Therefore, it may affect the security and safety of PayPal’s services. PayPal will need to invest more in its solutions for security system. Otherwise, it might have troubles with customers’ complaints. Secondly, Vietnamese people still have a strict justice of online payment. They seem to be faithful to traditional methods of payment because they are not sure about the safety of transferring money when shopping online. That is a matter of culture. Therefore, it is difficult for PayPal to change the way people make payments. Finally, e-commerce has just started in Vietnam recently. Actually, shopping online is still new to a large number of Vietnamese people. So the possibility of using electronic channel of payment is not popular. Most of the time, people use cash for making payment. If using plastic card for payment, they probably prefer to use services of the banks. As a result, together with offering a new method of payment for domestic and international payment, a matter of developing e-commerce definitely arises.

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CONCLUSION

The content of this research paper has just mentioned some important parts of PayPal as an objective outlook of this type of business. Having existed for just more than 10 years, yet PayPal has created a timely and convenient payment method that satisfies most of customers worldwide. The rise of PayPal Inc. is simultaneously the strong growth of eBay nowadays since it became the main mode of payment there. Through PayPal, all transactions were made in the simplest way. Up till now, it still ranks the top position compared with other online transaction channels due to its outstanding advantages embracing high security measures, safe and flexibility in customer’s accounts management. These values above are always tested and improved day by day based on customers’ feedback which are welcomed constructively and faithfully from eBay. Once having used PayPal’s services, clients tend not to change their way of payment just because they’ve all tried the best one! In addition, PayPal’s strategies in every different market indicate that the company never stops looking for the appropriate methods to reach their customers. From Europe to Asia, PayPal has widened its own limitation in this flattening world of high-tech markets.

There is to say, PayPal’s network

expansion is one of the considerable development contributing to the next steps of online shopping. This investigation about PayPal Inc. was implemented by researchers via limited numbers of pages. The development of PayPal in the world generally as well as in Vietnam market particularly is still on the trend ahead. Getting to know about PayPal helps readers to have a useful knowledge whenever going Page | 23

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shopping online. The expansion of PayPal, also, makes an innovative change in the commodity purchases. In future, there may be further change in making payment online with various methods given. Is PayPal still the number one in that never-end battle? Customers all over the world always watch over new stages of this giant company.

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REFERENCES eBay buys PayPal for $1.5 million, 2008. CNN News. Retrieved April 10th, 2011, from http://archives.cnn.com/2002/BUSINESS/07/08/ebay.paypal/ Margaret Kane (2008, July). eBay picks up PayPal for $1.5 million. Retrieved April 9th, 2011, from http://news.cnet.com/2100-1017-941964.html Troy Wolverton (2002, June). PayPal investors file to sell shares. Retrieved April 10th, 2011, from http://news.cnet.com/2100-1017935360.html?tag=mncol;txt Credit cards lose ground to PayPal. BusinessWeek. Retrieved April 9th, 2011, from http://articles.moneycentral.msn.com/Banking/FinancialPrivacy/CreditCar dsLoseGroundToPayPal.aspx History of PayPal. Retrieved April 11th, 2011, from https://www.paypalapac.com/sg/about-paypal/history-of-paypal.aspx) Businessweek. Retrieved May 5 2011 from http://www.businessweek.com/globalbiz/content/jun2008/gb20080617_22 1923.htm?campaign_id=rss_as BusinessWeek.com; 2/10/2011, p3-3, 1p How to use PayPal without a credit card, 2009 eBay’s big plan for PayPal, 2009, p.2 Business Week Online, 2009, p.2 Burrows, 2009, p.2 MacMillan, Douglas & Galante, Joseph, 2011, p.3 N-CAP Users’ guide, Everything you need to know about using the internetHow PayPal works, p.7 Page | 25

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McLeod, Ramon G., PC World, 07378939, July 2002, Vol. 20, Issue 7 Reid Goldsborough, PayPal's Growth Creates Complaints and Controversy, Community College Weekmm.cmeek.com, February 22, 2010 Mainelli, Tom & McLeod, Ramon G., PayPal’s problems, PC World, 07378939, Jul2002, Vol. 20, Issue 7 PayPal Payback, Good Housekeeping, 0017209X, Feb2009, Vol. 248, Issue 2 Rubenking, Neil J., Inside a "PayPal" Scam, PC Magazine, 08888507, Jul2003, Vol. 22, Issue 12 Aquino, Grace, Locked Out of a PayPal Account, PC World, 07378939, Sep2003, Vol. 21, Issue 9 Asina, P. (2009). PayPal to focus more on Asia-Pacific.The Nation. Retrieved June 19, 2009 from http://www.nationmultimedia.com/2009/06/19/technology/technology_30105577.php eBay launches PayPal in China with ChinaPay , November 7th, 2005, from Forbes.com- USA, http://www.forbes.com/feeds/afx/2005/07/11/afx2130856.html Robin, W.(2010). PayPal Wants To Go From 1000 To 2000 Employees In Asia – This Year. Retrieved March 17,2010 from http://techcrunch.com/2010/03/17/paypal-asia/ PR Newswire, PayPal to Open Regional Customer Support Center in Malaysia. Retrieved Jan 1,2011 fromhttp://en.prnasia.com/pr/2011/01/13/110007712.shtmlBusinessweek. Retrieved May 5 2011 fromhttp://www.businessweek.com/globalbiz/content/jun2008/gb20080617_221923.htm ?campaign_id=rss_as

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Retrieved May 5 2011 from http://jasonlog.supersized.org/archives/139-PayPalto-enter-Vietnam-market.html --------------------------------------------THE END---------------------------------------

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