There isn’t a week that goes by that doesn’t see yet another development in the mobile payment space. New startups pop up seemingly every other day. That’s why an Internet-oriented commerce company like PayPal, which is more than 10 years old, needs to stay on top of things.
This week, PayPal parent company eBay announced it reached a definitive agreement to acquire WHERE, the Boston-based location services and local discovery mobile application company. Terms of the deal were not disclosed, but basically, the integration with PayPal will allow consumers to find, shop and pay for local deals anytime, anywhere and help retailers reach local buyers in real-time.
It’s the latest in a string of things PayPal has been doing as of late. Dan Schatt, head of financial innovations at PayPal, says company executives know they’re doing something right when new companies crop up, as they have over the last several years, claiming to be the next “PayPal killer.”
“That keeps us up at night, to make sure we’re innovating and changing with the times. It is a space everyone wants to get into,” he says.
Last week, PayPal started rolling out a service that allows Discover card holders to send money to anybody using only the recipient’s email address or mobile phone number. The sender doesn’t need a PayPal account, and the recipient can open one up with a few clicks if they don’t already have one.
It’s the first integration of its type with PayPal and a card issuer. The service is available direct from Discover.com or through a mobile app for iPhone, Android or BlackBerry.
While it is a person-to-person (P2P) kind of money transfer, Schatt says PayPal’s definition of P2P is pretty broad. More than 8 million businesses and more than 230 million consumers use PayPal, and when PayPal says P2P, “we mean consumer to consumer, consumer to business, business to business and business to consumer,” he says.
PayPal, which has an 18 percent share of the global eCommerce market, is seeing significant growth in its mobile channel. In 2010, mobile payment volume increased five times compared with 2009. The reasons for the growth are obvious – more people carry mobile phones and have Internet access through them; people are feeling more comfortable using mobile phones to move money and consider it a wallet like never before; and it’s easy enough to do with three or four clicks.
For all the competitors trying to get into the payments space, PayPal executives still continue to call out two main competitors in every meeting they hold with prospective business partners: cash and checks.
NFC already is getting a lot of attention this year, whether it be Google’s designs or speculation about what Apple will or won’t have in iPhone 5. What does that mean for PayPal?
Well, he says, PayPal created a point of sale technology for the Internet, and it’s going wherever the Internet goes – that is to say, mobile. Last year, it got together with Bling Nation on NFC stickers to slap on phones for quick checkout. But PayPal isn’t putting all its eggs in one basket.
“We think there’s going to be multiple ways to get at the point of sale,” he says. “We aren’t betting on one particular technology… We think there will be a few.”