PayPal bullish on mobile money for 2012; still sceptical on NFC - Mobile World Live

PayPal bullish on mobile money for 2012; still sceptical on NFC

16 JAN 2012

eBay’s CEO John Donahoe (pictured) predicted at last week’s CES that its PayPal business will handle US$7 billion in mobile payment volume in 2012. One day previously at the same event David Marcus, PayPal’s VP of mobile, said the payments firm had reached US$4 billion in mobile payments in 2011, indicating the potential for a 75 percent annual increase. According to Marcus, the US$4 billion figure represented “a huge increase” from PayPal’s original 2011 projection of US$1.5 billion and the US$750 million in mobile payments it handled in 2010. Marcus said the successful growth was built on a combination of  PayPal’s “mobile-optimized checkout flows” and a rapid take-up in mobile shopping. The company currently has “more than 17 million” PayPal customers who “regularly” make purchases using their mobile phones, an increase from the eight million it reported in June, 2011, he said.

Separately Don Kingsborough, PayPal’s VP for prepaid and retail products, told GigaOm Pro that NFC is “a feature not a solution”, a sign of the company’s customary scepticism towards the technology.  “Do I think NFC will work someday? Maybe. But to me, NFC is a feature not a solution that solves problems. If your strategy is NFC today, you need a new strategy,” he said. However it emerged at the end of last year that PayPay is trialling NFC with two Swedish retailers. More typically the company is pursuing other options such as a PayPal card for users to access their account or enable them to enter their mobile phone number and a PIN at the point-of-sale terminal. The latter approach is illustrated in its current US trial with Home Depot, the result of a partnership with AJB Designs, a specialist in connecting terminals at leading retailers with payments processors, banks and credit card providers.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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