PayPal’s Offline Ambitions.
by Kate Enright
PayPal have been the world’s leaders in online payments for many years now, and have gone on to conquer the world of mobile payments of late. The next logical step, it seems, is to move to the offline world, in-store, and they’ve taken a series of steps in order to start this process. They began by launching PayPal Here in March 2012 which allows small business owners or those not currently set up with an epos system to accept credit and debit card payments via mobile device. It was direct competition to Jack Dorsey’s Square project and was very successful when introduced into the U.S, Canada, Australia and Hong Kong. And with their latest joint venture with Softbank in Japan, they are set for domination of yet another market. In fact, after just 2 months of its release, “Paypal Here” signed up over 300,000 small businesses to the service. The advantage they have off the starting block is of course that most small businesses use PayPal for their online payments to begin with, they are known, trusted and it’s a logical move for business owners in the position they target.
So what now for PayPal on their path to retail domination? Well, they decided next to focus their attention on mid-size retailers, ones that have already integrated epos systems and have entire backend management systems in place. In an extremely savvy move, they decided to begin partnering with epos software and hardware providers themselves, so that retailers don’t have to, in their words “tear out existing systems”. To date they have partnered with Vend, ERPLY ShopKeepPOS, Verifone, Equinox Payments and Leapset, and will continue partnering with these types of companies to ensure easy PayPal offline integration into retail locations. They have partnered by introducing the PayPal Mobile app with stores’ current systems of payment and customer recognition. Once a customer has checked-in to a location with the PayPal app, they will be recognised by the store, marked to personally and be able to pay using only their mobile device.
The cashier matches up the name and image of the customer when they’re check out, and then the funds will be instantly transferred from the customer’s PayPal account to the retailer’s account. Receipts are then emailed directly to the customer, very convenient for later proof of purchase, and any step towards paperless life is a step forward in my eyes. A lot of retailers have taken on this new system and PayPal favour this particular case study of the retailer Sway when marketing the product. This video outlines the features and benefits of the system for them:
In early May 2012 PayPal signed up 15 major US retailers with their payments platform in-stores. The platform which allows for more personalized offers, loyalty rewards and payment flexibility, including the option of changing the funding source after a payment has proved extremely popular. The features are still in the works but PayPal believes it will be these added value tools that will be attractive to consumers and merchants, as it essentially does not cut time from the check-out process for either party. The service is now available in the UK, with clothing chains Coast, Oasis, Warehouse, and Karen Millen being the first to sign on to the service in this part of the world.
This app is one example of how retailers can use already widely available technologies to offer mobile payments in stores. In the case of PayPal, a user creates a barcode for a product in the app, they then present their device to get it scanned by the cashier and their PayPal account is debited.
So what about NFC? Isn’t that all anyone’s been taking about in terms of the future of mCommerce? Afterall, Google Wallet has incorporated it, so has Isis, why not Paypal? When asked by Techcrunch if they thought about the possibilities of integrating NFC technology into their solution they gave the following response, “We think that it will take years for NFC to get any kind of traction in stores, but we are helping retailers roll out mobile payments quickly and cheaply now,” said Rob Skinner, PayPal’s spokesperson in the UK. “We’re not dismissing NFC but our point is that the world may have moved on by the time NFC gets some kind of scale.”
Cameron McLean, Managing Director of PayPal UK, says that “mobile payments don’t need NFC technology to succeed,” adding that the PayPal instore service “works with the phones most of our customers already own,” and “our retail partner doesn’t have to install new systems to take in-store mobile payments.” PayPal has carried out research among major UK retailers that suggests you won’t need a wallet on the British high street in 2016. According to McLean, “a phone will be enough.”
So it seems that for now at lease PayPal are sticking to more traditional technology and making the delivery the innovative part, they have been right on just a couple of things in the past, so maybe they’ll be right on this. In any case, it looks like the future of the lowly wallet is definitely dwindling, whether you plan to use NFC or PayPal, you may no longer have to worry about whether your wallet fits in your back pocket!