Internet Payments Expert Call Shows Paypal (PYPL) the Clear Leader Today but Competition on the Sidelines

Baird analyst Colin Sebastian recently hosted an expert conference call with Business and Payments Advisor Brian Roemmele. Key highlights: 1) PayPal (NASDAQ: PYPL) is the clear benefactor due to product and sales breadth; 2) Facebook (NASDAQ: FB) will explore online payments after dipping its toe in the P2P industry; 3) competition from Square (NYSE: SQ) may be limited due to churn and without a larger sales force.

PayPal remains a clear benefactor of digital payment innovation, with a portfolio of products that encompass in-app payment processing (Braintree), peer-to-peer money transfer (Venmo), international remittance (Xoom), e-commerce (PayPal), and credit extension (PayPal Credit). PayPal's sizable salesforce should also help keep Braintree's offering competitive with Stripe's highly-regarded online payments gateway

The combination of a treasure trove of user data and buy button like initiatives make Facebook a potential payment innovator. Messenger already supports peer-to-peer payment, and Facebook has already articulated business-focused aspirations

Google (NASDAQ: GOOG) (NASDAQ: GOOGL) has now essentially emulated Apple's (NASDAQ: AAPL) playbook for mobile payments with Android Pay, but without the 15 bps/transaction financial benefit.

Square may not pose a significant competitive threat. Square has one of the best SMB payment solutions on the market but the >50% failure rate of micro merchants after 15 months presents some longer-term structural challenges.

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