PayPal Flexes its Muscle at MWC

by Harry Wang | Feb. 25, 2014

PayPal is on offensive at all fronts. The three initiatives launched sequentially within 48 hours show a multi-facet effort from PayPal to conquer the mobile payment market. First, it announced on the eve of MWC a dedicated mobile payment app for Samsung’s Galaxy Gear II—the new smart watch. Then during the S5 event in the evening of 24th, it announced it will be the payment solution partner to Samsung to power the Galaxy S5’s fingerprint-based NFC payment function. To round it up, it announced the next day the partnership with Deutsche Telekom for carrier billing, a feat from its Zong division.

From my meeting with Anuj Nayar, PayPal’s Senior Director of Global Initiatives, it is clear that PayPal has sensed the urgency to go broader and deeper with customers in order to take the leadership position in the mobile payment market. The S5 deal also reflects PayPal’s technology-agnostic view—Bluetooth or NFC or others, as long as they are standard-based. What’s more important to PayPal is customers—merchants and retailers in this case. PayPal will support what its customers want in terms of technology. I sense that for PayPal, mobile payment is now a land grabbing game—the higher merchant and retailer adoption, the more consumer usage will follow. It does not have startup’s challenges such as low brand trust and security concerns, so it can focus on user acquisition by being conveniently available at participating merchants and retailers.

The three announcements cover multiple fronts of the complex mobile payment ecosystem, which is covered in detail in Parks Associates industry report “Transforming Commerce—Mobile Wallets and LBS.” New device platforms for payment, in-store payment acceptance, carrier billing for digital goods--PayPal is interested in both your 99-cent transactions and big-ticket purchases. I intentionally left out its Beacon technology—it will be another blog post some time in the future.



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