PayPal Plots Its Future

You probably didn’t realize you’re tapping PayPal’s technology every time you take an Uber ride, rent a room on Airbnb or Venmo a friend after a round of beers.

And Hill Ferguson, PayPal’s chief product officer, doesn’t have a problem with that. As PayPal gears up to become an independent public company by spinning out from corporate parent eBay next year, it faces stiff competition from Apple Pay, Google Wallet and others in mobile payments.

This week, PayPal launched a challenge to Apple Pay and the Apple Watch by releasing an app for the Pebble watch that would let users make purchases at stores using only the watch.

But Snapchat easily eclipsed that news with the announcement of Snapcash, a partnership with Square that allows users to pay each other. The product illustrates the type of combined payments and services competition the 15-year-old payments pioneer-turned-laggard is up against.

PayPal’s biggest bet is to remain behind the scenes to become the “payments as a service” provider for any company that wants to move money digitally. The business had revenues of $6.6 billion in 2013 and has 157 million users.

Mr. Ferguson insists PayPal has a few tricks up its sleeve, including brand recognition among users in countries like China and Brazil who want to make cross-border purchases. The company doesn’t break out country-specific sales, but it said that half of its 2013 revenue came from international transactions and that it processed 2,000 cross-border transactions per minute in the most recent quarter.

The Information talked with Mr. Ferguson about competition with Alipay, applying PayPal identities in the physical world and more. Edited excerpts below.