PayPal is looking to create a new payment ecosystem, using existing technologies and a revolutionized payment method that may have the likes of banks, creditors, and proponents of NFC payments shaking in their boots.
Shopping is a 24/7 occurrence and is not limited to traditional stores and vendors. Nor is it limited to online traffic–contrary to trends in online shopping and transactions. PayPal’s new system, recently unveiled to merchants at a partner event, challenges the likes of credit card giants and new NFC-payments entrants directly at the cash register.
PayPal aims to bridge the gap between online and live point-of-sale transactions without making changes to existing payment systems, while using technology already implemented by its services and the consumer’s mobile phone. According to PayPal President Scott Thompson, the changes his company aims to make will work with ”the new and the old.”
“We can’t be so bold or arrogant to think that you’ll adopt to the standards we’ve created. If we said ‘Throw away your terminals and get a new one, or buy a new phone’ … no one has that level of influence and pull.”
PayPal showcased technologies allowing the customer to enter a telephone number and PIN number linked to their PayPal account in order to handle in-store purchases, utilizing existing point of sale terminals. This alternative approach will allow customers to swipe PayPal-issued cards at existing point of sale terminals. Their cards will have no account numbers visible, nor will a credit card company logo be present on the card as it will be a PayPal-exclusive service.
Larger items purchased in-store can be scanned via traditional barcodes, allowing PayPal to find the exact item and allow the retailer to ship the product to a home address. PayPal will also allow credit lines to be established for larger purchases, allowing the customer to pay for it over a set amount of payments.
”An offline merchant today is seeing slow to no growth. It’s tough. E-commerce companies are still growing, and if you have both, you are seeing slow to no growth,” said Thompson in an interview with AllThingsD.
Relying on mobile phone technology allows PayPal the benefits such as check-ins for in-store promotion and marketing, while disregarding the need to update bank accounts, credit lines, or phones. Merchants will be able to use existing point of sale systems and feel less obligated to companies such as Visa, MasterCard, and American Express for transaction and payment services. Much of what PayPal offers can be done due to the numerous acquisitions the company has made in a bid to streamline the offline and online payments processes.
PayPal makes bold moves in light of a market where NFC technologies are touted left and right, much to the average consumer’s apathetic endorsement. ”We are not embracing technology, we are solving the problem of what can I do today. It’s hard for me to speak [about NFC] until there are standards. You can’t ask retailers to implement three to five standards,” says Thompson.
While Google and credit card companies are looking to turn your cell phone cases into wallet replacements outright, PayPal is looking to turn your cell phone holster into a solution that solves a problem rather than mucking it up with unnecessary add-ons.