PayPal’s offline initiative is in part a response to stiffening competition in the payments market. “But by Christmas PayPal will start to be a more prevalent way to pay.” RIVALS For us to get to those kinds of levels will take time,” he said in an interview. “An average credit card user uses the card 18 to 20 times a week. Kingsborough said he expects the cards to be used a lot at first, but they will be slowly replaced by the app as more stores set up mobile payments and shoppers get comfortable using their smartphones to make purchases. PayPal will also be sending out new PayPal cards to users who still prefer to swipe. “Unless there are specific benefits that consumers can touch and feel, they’re unlikely to adopt something new.”ĭon Kingsborough, the PayPal executive overseeing the offline push, said the company will soon be releasing an updated smartphone app that makes it easier for consumers to enroll in the program. “I ask at my local Home Depot and I get the same response - not many people have used it,” said Brian Kilcourse of RSR Research, a consulting firm focused on retail technology. Cashiers there said very few customers chose to use PayPal - and some who did soon gave up because they found keying in a bunch of numbers was not as convenient as swiping a credit card. PayPal’s uphill battle becomes clear from interviews with employees at the Home Depot store in San Carlos, California, one of the first to test the new service. They can also use a PayPal card that links to their account. At the checkout counter, shoppers can use PayPal by typing in a mobile phone number and a four-digit PIN that has to be set up online beforehand. PayPal has been testing its physical payments service at Home Depot Inc stores since early 2012. “That’s a huge mindset shift and the average consumer wonders why they would need it.” “Consumers need to be convinced they need a single digital wallet or card that links to all their other cards,” said Rick Oglesby, a payments industry analyst at Aite Group, which provides research to financial services clients. A foothold in physical payments, a $10 trillion market roughly 10 times the size of online transactions, could power longer-term growth.īut a nagging question hangs over PayPal’s push to checkout counters: how can it convince consumers to try its new payment method when swiping a credit or debit card is so easy? The 13-year-old payment service accounts for about 40 percent of eBay’s revenue and its growth is slowing. The deal means that, by the end of this year, PayPal will be accepted as a payment option in roughly 2 million retail stores that already take Discover credit cards.įor parent eBay Inc, PayPal’s expansion is crucial. The online payment service will take a giant step beyond its Internet roots on April 19, when a partnership with Discover Financial Services officially kicks in. A PayPal card sits at a cashier station at a Home Depot store in Daly City, California, February 21, 2012.
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