It’s not just for online anymore. That would be PayPal’s increased visibility at brick-and-mortar merchants for POS payments via QR code. Last year, PayPal partnered with InComm to offer in-store payments at CVS. Now PayPal has picked up the pace and can be found in several hundred thousand retail locations.
While in-store payment volume is a slim piece of the overall transaction pie for PayPal, it’s another slice of revenue-generating transactions for its network. This could not come at a better time as consumers and merchants want more contactless payment methods in these continuing times of social distancing.
The following excerpt from a Wall St. Journal article reports more on the topic:
PayPal Holdings is breaking into stores across America. For years, investors wondered if the digital-payment giant would cross over into the physical realm in a big way. The pandemic, which has been a boon for contactless tapped or scanned payments, seems to have gotten that ball rolling. PayPal on Wednesday said its payments with QR codes—digital scrambles that can be displayed by phones and scanned at checkout counters—are now accepted at more than 600,000 retail locations, and that in 2020 it had signed up 29 large enterprises such as CVS and Macy’s to offer them. PayPal did more than $20 billion worth of in-store volume across its payment types in 2020.
Plus, in-store transactions are relatively profitable for PayPal. For one, having a viable in-store option apparently pumps more volume through already-acquired users’ accounts: Last year, there was a 19% increase in payment volume for PayPal users who started regularly using QR codes. This helps PayPal more closely embed itself in users’ day-to-day lives, giving it further opportunity to offer its growing list of services, like buy-now-pay-later and bill payments. PayPal’s branded in-store transactions like QR codes also generally have better take rates, or how much of the volume ultimately becomes revenue for PayPal, than many kinds of online payments.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group