PayPal Introduces Mobile Payment Platform

by Matt Klassen on March 20, 2012

This past week PayPal finally joined the mobile payment revolution, unveiling PayPal Here, a platform designed to bring mobile payment options to all businesses, whatever their size. This focus comes as part of a larger; more disjointed, and fragmented focus on making mobile payment more affordable and accessible for the SMB segment.

In fact, according to PayPal its new global mobile payment system will allow small businesses to accept almost any method of payment, from swiping cards on a thumb-print encrypted reader, to using a smartphone camera to scan and process cards and cheques, to allowing the retailer to invoice directly from the PayPal app itself.

But as revolutions go, the push towards mobile payment is anything but organized, with no one platform emerging as anything close to a market standard. In fact, the mobile payment revolution is so fragmented that the question for the SMB segment is not which platform is the most affordable, but how many platforms will businesses need to serve their customer base?

As I said, the question small business owners will likely be asking is, with so many would-be competitors already looking to provide SMB mobile payment solutions, what makes PayPal Here different from the rest?

For starters, as PayPal’s official blog states, it’s a product from PayPal, a household name when it comes to reliable and secure online financial transactions. The PayPal Here platform will come with the same high standard of security the millions of customers have come to expect from the PayPal brand, offering companies its world-class fraud management capabilities and 24×7 live customer support.

Beyond that, PayPal Here is affordable, charging merchants a flat rate of 2.7% for card swipes and PayPal payments. Participating merchants will be given a business debit card for quick access to their funds, and as a promotion, the company is offering them 1% cash back on eligible purchases.

A mainstay of online transactions, PayPal is looking to transition into the real world, establishing itself as the new retail payment platform going forward. To that end, PayPal Here is but one part of a multi-pronged strategy that will see the company create a mobile wallet presence as well as offer customers PayPal cards for debit transactions directly with their online accounts.

While there’s no question that with its brand recognition in the online payment space and the backing of eBay PayPal has a good shot at establishing a foothold in the mobile payment market, for me the question still remains, why PayPal? By all accounts, the company isn’t developing a NFC based platform, a technology that I still see as the wave of the mobile payment future, instead focusing on payment options that seem more like what we already have in debit cards, credit cards, and cheques.

With this in mind, it seems to me that PayPal offers little or nothing original to the mobile payment revolution, serving only to give retailers and customers yet one more confusing option in an increasingly fragmented market space.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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