Confidential and Proprietary

WebIt, Sophia

7-8 Oct 2009

Przemek Pluta

PayPal Europe

Country Manager, Poland

Cross-Border E-Commerce

Confidential and Proprietary

What we will talk about

Cross boarder trade opportunities

PayPal powering global e-commerce

Some examples from the Polish market

TODAY’S AGENDA

They don't call it the World Wide Web for nothing

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1989,Tim Berners-Leeinvents World Wide Web

Only 20 years later…

20,3

13,6

5,6

4,9

4,0

3,3

2,9

2,5

2,3

2,2

1,7

1,7

1,6

1,6

1,5

1,4

1,4

1,3

1,2

1,2

China

United States

Japan

India

Brazil

Germany

United Kingdom

France

Russia

Korea South

Italy

Spain

Mexico

Turkey

Indonesia

Canada

Iran

Vietnam

Poland

Argentina

0 5 10 15 20 25

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% of global online population

Source: www.internetworldstats.com, 2009 est.

Every 3rd online users comes either from China, India or Brazil.

Your best potential customers probably don’t live in your country.

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Source: IMF, 2008

GDP (PPP) per capita

But the easier first step would be to focus on matu re and lucrative e-commerce markets with high population like US, DE, FR or UK.

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With 800M population and 170 B EUR e-commerce the EU represents a huge opportunity.

Source: First Annapolis, 2009 eCommerce payments acceptance update, August 09

E-Commerce turnover in 2007 in Euros

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

And cross-border online trade already takes place.

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Sourc: A report on e-commerce published by the Commission in March 2009 (see IP/09/354)

One out of three European consumers would consider buying a product or a

service online from another EU country if it were cheaper or better.

• 7% of EU consumers shop online abroad

• 21% of online retailers sell cross-border

• Obstacles / bariers:

• Language

• Regulatory

• Delivery

• Payment

PayPal presence

Fully localized site

Send/receive/withdraw enabled

20/80 light localization

12% sent 37% sent 58% sent

Used in190 countries and 19 currencies. PayPal is a global online trade enabler.

Cross-border TPV represents 22% of total PayPal TPV

X-border sent TPV as a percentage of total TPV

Key barriers in starting a cross-boarder online business should be simple to overcome.

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How am I going to get paid?

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Local payments methods are still important in EU

How will I communicate with my new customers?

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How will the goods be delivered? And what with the customs?

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What if the foreign customer has questions or complains?

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EU laws provide the legal framework for online tradeDistance Selling Directive 1997/7/EC, E-Commerce D irective 2000/31/EC, Unfair

Commercial Practices Directive (UCP) 2005/29/EC.

• Information which online traders must provide– Identity, contact details of the trader– Main characteristics of products: full price (incl uding taxes), delivery costs – Payment and delivery arrangements– Address for complaints– Information on consumer rights such as the right to withdraw

• Under the Directive, the trader is obliged to deliv er the goods within 30 days after the order is placed.

• The consumer has the right to cancel the contract ( and send the product back) within a minimum of 7 working days without giving a ny reason and without penalty, except the cost of returning the goods.

• To confirm the receipt of the order promptly and by electronic means accessible to the consumer.

• Black List of techniques that are illegal (such as fake "limited" or "free" offers, or bait advertising).

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Anything else before I get started?

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What we will talk about

Cross boarder trade opportunities

PayPal powering global e-commerce

Some examples from the Polish market

TODAY’S AGENDA

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• Headquarters: San Jose, California

• European Bank HQ: Luxembourg

• Founded: 1998, acquired by eBay in 2002

• CEO: Scott Thompson

• More than 193 million accounts –190 markets and 19 currencies• 9% of global e-commerce• 66% of internet users in EU know PayPal • 36% have already pay with PayPal*

•In the last 3 months.

•Source: Forrester Research

PayPal: Facts and Figures

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Our wallet connects buyers and sellers

"I like the security that PayPal offers. I don’t like giving my card details out directly to any company."

"I wouldn’t have bought at these merchants if I hadn’t seen that PayPal was offered."

"I like the security that PayPal offers. I don’t like giving my card details out directly to any company."

"I wouldn’t have bought at these merchants if I hadn’t seen that PayPal was offered."

Buyer pays with PayPal –as easy as sending an eMail

1

PayPal credits the amount2

Seller sends the shipment3

1

3

PayPal Balance

Bank transfer

€Buyer account

€Seller account

Withdrawing methods

Funding method

giropay

Direct Debit

Credit Card

Bank Transfer

PayPal Balance

2

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How does it work for the buyer in the merchant website

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FRANCE

GERMANY

SPAIN

ITALY

UK

US

SWITZERLAND

CANADA

CHINA

AUSTRALIA

We integrate local funding sources

Connection to 27 financial networks and &15,000 local banks.

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PayPal represents 9% of worldwide e-commerce

193 millions accounts worldwide

50 millions in Europe

� $16.7 billion Total Payment Volumes (2008)

� 15% of US E-commerce� 9% of worldwide E-commerce

Key figures

22

8

9

3

95

2

1

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PayPal is increasing Consumer Usage

Source: Forrester, European Technographics Media, Marketing and Retail Online Survey, Q3 2007 and Q3 09

26%

41%

20%

25%

36%

47%

37%

46%

EU UK FR DE

'07

'09

‘Which of the following online payment methods have you used in the past three months?’ - PayPal

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Payments that are not so much alternative anymore

Source: First Annapolis, 2009 eCommerce payments acceptance update, August 09

34%

22%20%

18%

41%

27%

23%

17%

4% 3%

PayPal Co-brand

PLCC

BML Google eBillME Amazon

'08

'09

Payments acceptance among US Top 500 Internet Retai lers

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How do we keep up with innovation?

RIM Appstore Mobile P2P Yahoo! Mail Send Money Twitpay

We enter agressively in the Mobile space

And we go where the users are

But the most exciting things are about to happen very soon …

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PayPal X: Launch on Nov 3, SF

Confidential and Proprietary

What we will talk about

Cross boarder trade opportunities

PayPal powering global e-commerce

Some examples from the Polish market

TODAY’S AGENDA

International online shop that happen to be based in Poland

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JeansShop.comJeansShop.com

Based in Łódź, central Poland, selling photo equipment worldwide on eBay

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Very succesull domestic business but friendly & open for intl. customers

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Think globally, and follow a few simple rules, your business can be as world-

wide as the Web itself.

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What we will talk about

Thank you!

ppluta@paypal.com

Building blocks for PayPal in Poland

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65% Penetration

2/4 PSP, 9/10 Carts

4 / top 10, 14 / 100

# SPs at 100%+ YoY

1 000 000 by EOY 2009