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PayPal expects its mobile payment volume to reach $3.5B by year-end

October 20, 2011

The volume of payments made via PayPal from mobile devices will total more than $3.5 billion in 2011, with  the company expecting a significant jump in mobile payments during the upcoming holiday shopping season.

PayPal’s mobile payments volume predictions for 2011 have grown throughout the year, starting at $2 billion in the beginning of the year and jumping to $3 billion a few months ago. Earlier this week, eBay CEO John Donahoe upped the number again during a discussion on stage at the Web 2.0 Summit, saying he expects the total to now reach $3.5 billion by the end of the year.

“Mobile is exploding,” said Anuj Nayar director of communications for PayPal, San Jose, CA.

“We are seeing a massive growth in mobile payment volume,” he said.

“We think the numbers for mobile payments are going to be huge for this holiday season.”

Rapid growth
EBay reported financial results on Wednesday for the third quarter ended Sept. 30, 2011.

The company said that revenue for the quarter increased 32 percent for a total of $3 billion. EBay also reported net income of $490.5 million, or $0.48 per diluted share.

The company pointed to the growing role that mobile plays as online and offline shopping blend into a single commerce environment in the results. EBay is focused on enabling commerce anytime and anywhere.

PayPal’s overall payment volume grew 31 percent in the third quarter for a total of $29.3 billion. T

The Marketplaces business saw overall merchandise volume increase by 16 percent year over year for a total of $14.7 billion.

EBay now expects the volume of merchandise sold by eBay via mobile devices to  reach $5 billion this year. Earlier this year, eBay had put the number at $4 billion.

Downloads for eBay’s mobile applications have surpassed 50 million globally.

Mobile shopping is different
By 2013, PayPal expects mobile payment volume via PayPal to total $7.5 billion, per Mr. Nayar.

“Mobile is a small proportion of what eBay expects to do overall as a company but a rapidly growing part of that,” Mr. Nayar said.

Initially, eBay had expected mobile payments would cannibalize online shopping. However, this is not proving to be the case.

“What we are seeing is that mobile is additive to the online site,” Mr. Nayar said.

“People shop in very different manners from mobile,” he said.

Mr. Nayar points to how shoppers use mobile around Thanksgiving as an example of how mobile shopping is different.

Much  of the shopping around the Thanksgiving holiday has traditionally taken place the day after Thanksgiving when consumers go the malls to look for special offers and on the following Monday, when they are back at work and are looking for online deals.

However, PayPal says mobile is changing this as a growing number of consumers shop from their mobile devices on Thanksgiving Day.

“We are seeing a whole new paradigm with consumers sitting on the sofa after lunch watching football and shopping via their mobile phones,” Mr. Nayar said.

PayPal has been enhancing its mobile payments offerings in recent months, including rolling out a one-stop shop for merchants to engage their customers directly during every part of the shopping cycle (see story).

EBay also recently acquired mobile payments provider Zong to enable carrier billing (see story).

“There is explosive growth in the way that people do everything via mobile and embrace for all sorts of activities,” Mr. Nayar said. “Clearly, people are embracing shopping as one of the key ways they use mobile.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York 

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4 Responses to “PayPal expects its mobile payment volume to reach $3.5B by year-end”

  1. jim shanahan Says:

    Amazing numbers! I just heard Don Kingsborough give the same numbers this week at mobile conference @mobile_pymnts. Was wondering if you knew how much of this represents use of mobile at the POS vs. using my phone to get on the internet and then pay with paypal. I ask because he led people to believe mobile at POS is big, but my guess is its pretty small.

  2. Kim Fraiser Says:

    I heard CSI globalVCard was launching on iTunes in October. It’s already on the Android market but now I can have the application on my iPhone and iPad! It’s a great product for my business to make secure mobile payments on the go.

  3. Philip Cohen Says:

    “Most folks on Wall St. view eBay really as PayPal plus a marketplace …”

    An astute observation, but John Donahoe and Scott Thompson are simply delusional if they think that PayPal can continue to underpin the faltering eBay “house of cards” by becoming even a minor threat to the existing banks/Visa/MasterCard payments systems at traditional Point-of-Sale—the idea is pure science fiction. (“Beam me up Scotty!”)

    The real question is, when are the world’s various “banking” regulators going to finally do something about over-sighting this unethical, unprofessional, unregulated and clunky financial operator that offers unlicensed banking-type services and is, in effect, little more than a money gouging arm of the Ho’s “eBafia”?

    Even though PayPal clearly offers banking-type services (ie, holding users’ funds in non-prudentially regulated and non-FDIC insured banking-type accounts, etc), PayPal is mostly registered in some places not as a bank nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal itself has even claimed that they “are not a payment network”, and there is a grain of truth in that claim because most (but not all) of their activities facilitate the transmission of funds simply by riding on the back of the banks’ existing payments processing systems.

    In fact, the only thing creative about PreyPal has been their founding use of users’ unique email addresses as identifiers for online payment transactions. PreyPal is otherwise no more than a blood-sucking parasite riding on the back of, and in the main cannot function except via, Visa/MasterCard and the banks’ existing payments processing systems.

    Regardless, outside of PreyPal’s mandated use on whatever will ultimately be left of the Donahoe-stagnated* eBay Marketplace, PreyPal (and most other third-party payments processors) will eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together. There is nothing surer than the sun will rise in the morning.

    Both eBay and its ugly daughter PreyPal are most devious, unethical, unprofessional organisations: they both have become the most despised commercial entities on the planet—apparently, even more hated by many than “the banks”. eBay, amongst many other things, has forever knowingly and criminally, facilitated shill bidding fraud on their trusting auction buyers. And what else can be said about PreyPal that a great many PreyPal merchants don’t already know, to their cost …

    Having said that, it’s possible that PreyPal can survive by becoming the merchant account provider “of last resort” for those very small or unscrupulous merchants unable to get a real merchant account from their own bank—Oh, hang on, hasn’t PreyPal always been just that, and charged all their users accordingly?

    * See

    eBay, a Knowing Criminal Facilitator of Auction Shill Bidding Fraud: Case Study #4:

    PayPal Claims that PayPal Is Not a Payments Processor!

    And, from along the way, a compilation of (mostly inane) quotes from eBay executives:

    Enron / eBay / PayPal / Donahoe: Dead Men Walking.

  4. Bob Says:

    Ah. I see Philip is trolling the forums again looking for a way to bash eBay and PayPal. Give it up. Over 100 million active users trump your little rant. Your “reply” is tired and out of date. Read before you click, follow the rules and grow up.

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