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Table of Contents

Lead Story

Join the race to prepaid

News

Industry Update

PayPal aims for ubiquity with new partnerships

MasterCard's EMV push, introduction of mobile POS

Hactivists nab and leak 1.7 gigabytes of sensitive data

PCI SSC issues mobile help, calls for SIG topics

Features

Payments industry infographic

Research Rundown

ISOMetrics:
Prepaid in ascendance

Selling Prepaid

Prepaid in brief

Repeal of N.J. gift card law advances

CFPB takes first steps to regulate prepaid

Education

Street SmartsSM:
Do your best and move on - no matter what

Jeff Fortney
Clearent LLC

A sense of urgency

Steve Norell
US Merchant Services Inc.

The shifting ground of pricing

Adam Atlas
Attorney at Law

What is the most productive thing you've done today?

Tom Waters
Bank Associates Merchant Services

Marketing your business with YouTube

Peggy Bekavac Olson
Strategic Marketing

Company Profile

Veritrans Merchant Services LLC

New Products

A new 'Jack' in town

PaySaber Jack
USA ePay

Hand-held printer hits stateside

SPP-R300 mobile printer
Bixolon America Inc.

Inspiration

Each sale is a new tent to pitch

Departments

10 Years ago in The Green Sheet

Forum

Resource Guide

Datebook

Miscellaneous

2012 events Calendar

A Bigger Thing

The Green Sheet Online Edition

June 11, 2012  •  Issue 12:06:01

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PayPal aims for ubiquity with new partnerships

PayPal Inc. intends to provide its payment options everywhere - online, in the mobile arena and, now, offline. PayPal President David Marcus and PayPal Vice President of Retail and Prepaid David Kingsborough made this clear during a May 24, 2012, press event at company headquarters in San Jose, Calif., where they indicated PayPal is nearing critical mass in the payments space.

The company now has agreements with all three major POS terminal manufacturers and four new POS software vendors to integrate PayPal payment software on their terminals and in their software. The agreements give PayPal access to 40 million terminals globally, making it a nearly universal option for customers of large and midsize brick-and-mortar retailers, PayPal noted.

PayPal heralded new partnerships with terminal manufacturers VeriFone Inc. and Equinox Payments LLC, respectively the number one and number three terminal manufacturers in the world. These payment hardware providers agreed to include the entire PayPal payment suite on their consumer-facing terminals. PayPal already has a similar agreement with the world's number two terminal manufacturer Ingenico SA.

Consumers will be able to choose any of the PayPal payment options at retailers offering the service on their POS terminals - PayPal card and PIN, phone number and PIN, or, in the near future, near field communication (NFC) and PIN.

PayPal also touted new agreements with four POS software providers: Leapset Inc., a POS system for restaurants that allows customers to order, check in, earn rewards and pay - all before arriving at the restaurant; ShopKeep.com Inc., a software-as-a-service (SaaS) for the Apple Inc. Mac and iPad POS systems; Vend Ltd., an online POS and inventory management software provider; and Erply, a SaaS POS provider. These companies collectively offer access to 50,000 mid-market offline businesses using their software. PayPal additionally stated 15 new national retailers will install its payment software on their POS terminals.

What the agreements mean

Marcus said retailers can adopt the PayPal solution without ripping out and replacing their current POS hardware, installing NFC devices or instituting terminal upgrades. He noted PayPal calculates that the potential for the offline market is 17 times greater than its online business and added that the company projects it will process more than $7 billion in mobile payment volume this year, not including its new offline processing business. "We are approaching ubiquity," Kingsborough said. "We will be everywhere the consumer wants to be."

Dwaine Kimmet, Treasurer and Vice President of Financial Services for PayPal partner The Home Depot U.S.A. Inc., said at the press conference that he believes PayPal is driving electronic wallet acceptance. "There is not another retail solution out there that keeps the customer at the forefront," he said, adding that PayPal provides the potential for adoption and ubiquity that NFC technology does not because "there is no standard for NFC at the moment."

PayPal good for payment pros

Rick Oglesby, a Senior Analyst with the business technology research and advisory firm Aite Group LLC, said PayPal's move into the brick-and-mortar merchant realm represents "a big opportunity for the acquiring space." He told The Green Sheet PayPal's decision to focus on cloud-based POS providers that can turn on multiple markets at a time is a "no-brainer strategy" that makes inroads into a new and growing segment of the payments market.

However, he pointed out PayPal remains less a payment network than a payment brand, and in the background, PayPal is still using the traditional card brand payment rails.

Merchants need assistance

Oglesby said PayPal's big challenge is to activate the 40 million terminals to which the POS manufacturing partnerships give it access. He believes many of those terminals aren't compatible with PayPal's software solution and, therefore, represent a hands-on opportunity for merchant level salespeople. Terminals and software need support at the local level with setups and upgrades. "They are going to need ISOs," he said. "Turning things on at the VeriFone level isn't going to get them where they want to go."

According to Oglesby, PayPal's enablement of "a variety of dynamic consumer solutions and back-end solutions" in which acquirers will play a big part is potentially another benefit for merchant services providers. For instance, the PayPal Media Network offers traditional, brick-and-mortar retailers behavioral, demographic, location and contextual targeting to support local advertising, loyalty and coupon programs.

The merchant pays for this service as potential customers "click" on offers. "It should mean a lot to merchants if a retailer only pays when they get a reaction," Oglesby said.

PayPal still has a "tough road ahead" to adoption, Oglesby said, adding that merchant adoption is only part of the equation for PayPal. For PayPal's reach into the offline merchant realm to be successful, consumers still have to adopt the PayPal payment system.

For additional news stories, please visit www.greensheet.com and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems