PayPal Hopes to Break Shoppers’ Swipe Habit in Stores
PayPal will soon be accepted in about 2 million retail stores that currently take Discover cards, but for in-store PayPal payments to catch on, “consumers need to be convinced they need a single digital wallet or card that links to all their other cards,” says Aite Group analyst Rick Oglesby. PayPal’s Don Kingsborough says the company will issue an updated smartphone app that will make consumer enrollment in the program easier, and which will eventually replace cards as more retailers deploy mobile payments and shoppers become more accustomed to smartphone transactions. “By Christmas PayPal will start to be a more prevalent way to pay,” Kingsborough predicts. PayPal’s move is partly in response to intensifying competition in the payments market, with similar offline smartphone payment implementations by Square and others. Meanwhile, although PayPal is a valued partner of MasterCard and Visa, its offline expansion will make it more of a competitor because it can cultivate close relationships with consumers and distance them from card networks and issuers. Retailers also hope that a partnership with PayPal may give them leverage to negotiate better terms with card networks.
From “Analysis: PayPal Hopes to Break Shoppers’ Swipe Habit in Stores”
Reuters (04/11/13) Barr, Alistair