PayPal partnerships fuel continued innovation

As reported in "PayPal staking claim in mobile payments sphere," The Green Sheet, Oct. 10, 2011, issue 11:10:01, PayPal Inc., the international payment franchise owned by eBay Inc., has recently used acquisitions to foster innovation in its payments technology. Now PayPal is partnering with a number of companies to push payments into new frontiers.

Russ Jones, a Partner at research and consulting firm Glenbrook Partners LLC, said in a recent blog post, "PayPal is … providing a rationale for merchants to adopt without the capital expense of redeploying terminals and providing consumers with an incentive to use PayPal as a payment option at [the] POS."

Partnering

Some of the new partnerships and technology were introduced at the October 2011 BAI Retail Delivery conference in Chicago. They include:

• A new person-to-person (P2P) payment solution developed for United Services Automobile Association members using phones equipped with the Google Inc. Android operating system.
• A partnership with mFoundry Inc. to further mobile banking technology.
• A partnership with NCR Corp. and S1 Corp. to allow real-time P2P payments from bank ATMs to anyone that has a mobile phone or e-mail address.
• A partnership with BancVue Ltd. that will give BancVue's network of 1,300 community banks the ability to offer customers P2P money transfers in 2012. The technology integrates PayPal's Send Money with BancVue's Kasasa 360 money management technology.
• A partnership with MeridianLink Inc. to allow customers to open and fund new back accounts online through PayPal.
• A partnership with ezRez Software Inc. to create an option for consumers to redeem points from frequent flier or hotel rewards programs directly into PayPal accounts.
• A partnership with Sweden's Accumulate AB based on Accumulate's security platform, Mobile Everywhere. The partners will create mobile services projects for the Swedish market.

Dan Schatt, PayPal Head of Financial Innovations, said, "Each of these offerings will not only allow for more flexibility in how consumers use their money, but will also enhance convenience, ease of use, safety and security."

Innovating

Other PayPal innovations that have not yet launched, but were demonstrated at the eBay X.Commerce Conference in San Francisco in October 2011, include:

• An unembossed, PIN-enabled PayPal mag stripe payment card that, when swiped at the POS, uses a PayPal application programming interface over the Internet to authenticate the buyer, access and apply relevant credits, capture the transaction, and generate a digital receipt. This system does not use the card brand network infrastructure, nor does it necessarily involve a merchant acquirer.
• A post-payment option that allows merchants to get paid immediately while customers retain the option to fund the purchase with installment payments or a different form of payment. For instance, a consumer may decide to make an automated clearing house payment but then decide later to switch payment to a credit card.
• PayPal Access, a technology that allows consumers and merchants to easily create accounts and complete transactions – including such functions as user verification, shipping information and payment details.
• A deepening relationship with Facebook in which PayPal is already a payment partner for self-service ads and Facebook credits. Facebook's Head of Platform and Mobile Marketing, Katie Mitic, joined eBay's Board of Directors in September 2011.

Based on its acquisitions to date and projects in the wings, it appears PayPal is aiming to capture a commanding piece of the payments pie.

"EBay has been very vocal about mobile starting to blur the distinction between online and offline, and that's something we see very clearly as an important trend in the market," Glenbrook's Jones noted. "We think buyers and sellers don't see the distinction today and, quite frankly, don't care. Consumers just want to buy things, and merchants just want to sell things."

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