Thursday, October 31, 2013

eBay, PayPal Helping Shape the Future of Mobile Commerce

I was at eBay earlier this week for a paid engagement related to design of their future offerings.  Even though I am not supposed to reveal any details of what I learned about their future directions, here is an article I wrote about how eBay/ Paypal are helping shape the future of Mobile Commerce before my visit. 

Mobile commerce holds so much potential - even though it's still relatively a fledgling industry; like many, I don't see it just subsuming  the so called eCommerce, but also augment or replace some components of the "wired" payment networks. By "wired" network, I mean the card networks operated by Visa/ Mastercard for Credit/ debit card transactions and ACH system  in US and similar systems in other countries for bank transfers. 

eBay, through it's payment subsdiary PayPal, remains  front runner in mobile commerce and is poised to help shape the future of mobile commerce around the globe. 

Last month, eBay acquired mobile payment technology company BrainTree in a US$800 million deal that is viewed as a “significant step forward” in eBay’s mobile payments strategy for PayPal, according to a prominent mobile commerce  blog*1. The growth of mobile payments has so far come mostly from mobile app and mobile online payments, as opposed to proximity payments which happen inside a retail store. BrainTree provides support to PayPal in terms of mobile app and offline payments, extending PayPal’s reach in mobile payments with apps such as the Venmo person-to-person payments app.

However, the promise of proximity payments, where people replace their credit and debit cards with their mobile phone is too lucrative to be given up, even if the adoption has been slow. Paypal announced  a new service called Payment Code this week at the Money 2020 industry conference in Las Vegas *2. This service, to be launched in the first quarter of next year, will allow consumers to use app-generated QR payment codes or four-digit pin payment codes amounting to individual signatures to pay in participating retail stores.

In the first day of the aforementioned Money 2020 industry conference, the overall message was that the United States is the toughest country for mobile payments to be adopted. Mobile Commerce Press*3 reported that the reason is that each state has different regulations and licensing issues, which is akin to jump starting mobile payments in 50 different countries, according to John Muller, the PayPal general counsel and vice president, legal.

Muller believes that mobile payments and wallets are the future of digital space though, predicting non-card based payments, a greater influence from small merchants, and features such as loyalty programs that provide companies with important data even while consumers are becoming more hesitant to share information.

These recent moves are preparing eBay and PayPal to dominate in an industry that has been slowed by the vast number of options for mobile payments, making it difficult for consumers and merchants alike to choose one. eBay and PayPal are putting themselves in a position to grab hold and control the future of mobile commerce.

*1 Mobile Commerce Daily, eBay significantly boosts mobile app, offline payments with Braintree 
*2 Mobile Commerce Insider, Use PayPal in Stores with QR Codes
*3 Mobile Commerce Press, Mobile payments PayPal experts at Money 2020 call US the toughest market
*4 Black Friday Tablet Deals,

1 comment:

  1. Making it easier and easier to do transactions based on money is progress, but the real game changer is going to be when it is possible to record transactions based on value, and have an account where an individual's cumulative valuadd is on the record.

    Peter Burgess TrueValueMetrics
    Multi Dimension Impact Accounting