Is Visa worried about Paypal?

Visa recently published a report on Visa Checkout in which they stated that Visa Checkout delivers 17% better conversion than Paypal.

One of the interesting points about this report is that Visa considers Paypal as enough of a threat to launch a product similar to Paypal, Visa Checkout allows for completion of a payment with a user name and password (like Paypal), the underlying payment instrument (credit card or debit card) is stored in a secure environment with Visa.

Paypal has achieved its success through a focus on the user experience and has 162 million active registered users and processed $64.3 billion of volume in 2014.

However Visa is still the most popular way to pay online with approximately 50% market share, a total transaction volume of $6.3 trillion in 2014 and a network of 2.3 billion cards.

Why is Visa investing in Visa Checkout and actively comparing it to Paypal:

1) Visa’s volumes and number of transactions are on the decline. Wheres Paypal continues to see an approximate 25% year on year growth (albeit from a lower base).

2) The future of e-commerce is mobile and a user name and password combination is more user friendly on a mobile device.

3) Outside of the US consumer payment preferences vary considerably and credit cards like Visa are not necessarily the most popular methods to pay. A service like Paypal allows consumers to use the payment method of their choice while having the security and comfort of interacting only with Paypal. It doesn’t help that most of the expected future growth in e-commerce is expected to come from outside of the US.

What do you think, should Visa be worried about Paypal? Will Visa Checkout be a success or is Visa too late?