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PayPal: mobile payments accelerating drastically

October 15, 2009

PayPal is a major player in the mobile payments space

PayPal is a major player in the mobile payments space

EBay’s PayPal is seeing increased consumer acceptance of making mobile payments and says that the mobile commerce ecosystem is evolving quickly.

PayPal has launched a mobile Web site, an application for Google’s Android and the SendMoney application for the iPhone, and it powers mobile payments for the eBay iPhone application and RIM’s BlackBerry App World. In addition to the demand for ringtones, wallpapers and virtual goods and services, the popularity of mobile applications has made many consumers comfortable transacting via their handsets.

“PayPal Mobile has been operating for more than two years, and the good news is that, especially in the last 12 to 18 months, we’ve seen drastic accelerating in the market, especially with the launch of the iPhone and the App Store and the increased interest from consumers to transact via mobile,” said Francesco Rovetta, director of business development at PayPal Mobile, San Jose, CA.

“PayPal built its business on making it easier for users to make payments and transfer money, so it is strategic for us to go mobile,” he said. “Since the world has gone mobile, we’re investing significantly in the mobile space.”

PayPal is an ecommerce business that is a subsidiary of eBay that enables payments and money transfers to be made via the Internet.

The company specializes in person-to-person payments, letting online and mobile consumers transfer and send money to other PayPal accounts. The transfer is free if the account is linked to a bank account, whereas there is a fee if the consumer is funding the transaction with a credit card.

PayPal made it a priority to provide an experience that is optimized for various types of Web-enabled phones. The PayPal WAP site launched two years ago.

The SendMoney iPhone application has received more than 2 million downloads and gets fairly regular usage. The Android application launched in June and has also experience a good level of activity, according to PayPal.

“The number of consumers going mobile has increased significantly since last year,” Mr. Rovetta said. “Another great idea is mobile checkout, the opportunity to integrate our payment checkout solution into partners’ applications.”

Research In Motion announced the launch of BlackBerry App World, its response to Apple’s App Store, during its keynote address at the CTIA Wireless 2009: Mobile Life conference in April (see story).

Mobile application developers have yet another opportunity with BlackBerry App World, the storefront for downloading mobile applications to BlackBerry handheld devices, which could generate $800 million in sales this year (see story).

“This year we announced integration with RIM for BlackBerry App World in the U.S., the U.K. and Canada as the sole method of payment,” Mr. Rovetta said. “If consumers wish to purchase an application for their BlackBerry, they will use PayPal.”

RIM will soon extend PayPal to 10 more countries, primarily in Western Europe.

PayPal also has plans to make its application programming interfaces (APIs) public for the launch of its platform initiative.

“This will bolster the proliferation of our solution by letting others leverage our APIs,” Mr. Rovetta said. “Our going public with our mobile solution is a major milestone.

“We work with a select number of integrators to leverage our APIs to power commerce providers,” he said.

PayPal also specializes in fraud management, with a built-in mechanism to manage security very carefully.

“Our value proposition is ease of use, convenience, security and safety,” Mr. Rovetta said. “There are many mobile payments solutions in the market, which is a sign of how good the market is today.

“We believe that at the end of the day, PayPal provides a way for both buyers and sellers to benefit from a good business model,” he said. “It’s easy for merchants and businesses to integrate our platform, and it’s easy and safe for consumers to use PayPal.

“It’s a convenient and easy place to perform a transaction, whether online or on a mobile phone.”

EBay President/CEO John Donahoe said that mobile is one of the key areas that the company is focusing on since devices will surely impact the way that consumers shop (see story).

“Mobile commerce is really already happening, and everybody is focusing very much on app stores, which is a big wave we’ve seen in the last 18 months,” Mr. Rovetta. “People are not only more comfortable with mobile, the mobile phone is an accessory users never give up.

“The phone is always next to consumers, which is translating into their willing to transact on mobile,” he said. “PayPal’s mother company eBay has a very successful mobile business, and we integrated the PayPal mobile solution within the eBay Mobile product, most recently on the eBay iPhone application.

“The success we’ve experienced and the willingness of users to browse and pay for products on mobile is incredible.”

While the U.S. may not be at the cutting edge of mobile commerce, it is catching up quickly.

“It is still early on in the U.S., but it is accelerating and catching up to the European market,” Mr. Rovetta said. “We’ve been studying and analyzing the market carefully, and given the option of paying via mobile, users are growing more and more comfortable.

“We have a good portfolio of mobile products, and we’ll keep working on evolving it and making it available to a large number of merchants,” he said. “We see a growing opportunity for us as a business and for consumers.

“These are really exciting times for mobile commerce, so we’re very positive about the good things we’ll see going forward.”

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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