PayPal numbers for Q3 indicate that almost half of its transaction volume was “off eBay.”

Outstanding news for them, as this has been a core PayPal initiative for some time. The growth of PayPal transactions (as a % of all) that come from standard ecommerce transactions as opposed to the “niche” eBay auction payments (nice multi-billion dollar niche, by the way…) is a strong indication that PayPal sitting side-by-side with traditional online acceptance brands (Visa, MC, Amex, Discover, et. al.) is working.

Competitively, payments companies and their issuers have looked at this as an online phenomenon. Rightly so, as it has been. Online transaction volume is just north of 10% [my educated guesstimate…not hard & fast numbers] of all transaction volume for the payment networks, so not that much of a worry. It’s a highly publicized and in the spotlight channel to be sure, but it doesn’t represent an immediate threat to the vast majority of the revenue stream for traditional players.

But…

The multi-channel world in which we live makes the evolution to the physical world of successful brands like PayPal highly possible. 5-6 years ago (ok maybe 7-8 years ago), who would have thought that PayPal could sit next to Visa/MC/Amex/Discover on the merchant checkout page?

How far are we from PayPal usage at physical merchant locations? Keep an eye on the developments in the mobile arena, which represent a very viable conduit for this migration (has PayPal made any mobile inroads recently???).

Worlds are colliding, and it’s a really fun time for me to have my job…