PayPal gets Physical as Wallets go Digital

by Mercator Advisory Group 0

eBay’s recent acquisitions (Where, Fig Card, and Zong) are supporting PayPal’s efforts to penetrate the local payments environment. PayPal is relying on the adoption of mPayments as it shifts its focus of payments capture from online to brick-and-mortar locations.

“Innovating in the payments space in the physical world is about giving customers more options to pay, as opposed to offering a single technology. PayPal wants to add more ways your money can work for you, beyond just the payment itself.”

Payments innovation in the physical world may be difficult for a company that is limited in its POS reach with local businesses. The numbers may be in their favor, however:

“PayPal recently announced that it was upping the estimates of the amount of mobile payments transactions using the technology this year; doubling the estimate to $3 billion in mobile total payments volume (TPV) in 2011.”

Online POS machines are blending e-commerce and in-store transactions. This creates an opportunity for PayPal to be a tender type, greatly expanding the company’s addressable market. Sam Shrauger, PayPal’s VP of Global Product and Strategy, believes that digital currency will be ubiquitous in the U.S. by 2015. PayPal will only benefit from this trend however, if they can successfully establish a relationship with merchants at the point of sale.

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