One of the undisputed kings of payment in the online space over the last decade has been Paypal. It might have had a rough time in the eyes of many during it’s first year or two, but it’s well and truly established now as a key payment vector for small businesses and individuals (it’s adoption by Ebay providing a solid foundation for this).

But in the new world of start-ups that will herald the Mobile Money revolution, Paypal might be about to get a serious case of the innovators dilemma, even while it continues to grow.

Key in the questions being asked about Paypal’s ability to change is the current service has matured for a different landscape of accounts and payees – fraud and loss prevention strategies affecting up to 20% of your balance are going to be difficult to remove if a transition to a new type of payment system is needed without damaging the financial risk and stability at Paypal.

And then there’s the very close relationship between Paypal and a fixed bank account. By this I don’t mean the individual Paypal users matched up to accounts (although that’s very useful to have in any payment system) but that Paypal is locked into the payment structures demanded by the banks and card provides on the majority of transactions, especially international payments.

For Paypal to stay innovative, it’s going to have to work outside of these limitations, and do something that few incumbent companies can manage, and that’s continue to innovate while remaining one of the major players in the online payment world. They’ve proven to be effective and quick to react in previous years, so we’ll see if they still have it?