PayPal’s Pitch To Retailers To Use Its Mobile Wallet: Making The Most Of A Few Temporary Differences

Written by Evan Schuman
November 3rd, 2011

In the battle to woo retail partners, PayPal this week put out its best digital wallet presentations in a pop-up store in the Tribeca section of New York City. With presentations done by PayPal staffers and professional actors, PayPal is preparing to run retailers through five scenarios of mobile wallet retail usage. Unfortunately, PayPal’s demonstrations look eerily like those from Google and ISIS.

The problem is that the digital wallet concept—a place where you can cram in every payment method, CRM card and discount reminder—is the same, with trivial differences in partners and technology. PayPal did showcase some differentiators—such as the ability to pay with airline miles or other points programs, in addition to changing the payment method days after the purchase has been finalized—but it also conceded that there’s nothing preventing Google or ISIS (or Apple or others) from offering identical services.

Some other interesting—although potentially temporary—PayPal differentiators include what PayPal Global Communications Director Anuj Nayar referred to as the “empty hand” payment method, where a customer who has gotten his or her phone and has no cards can instead type in his or her phone number and a PIN and pay that way.

That ability to change payment methods (from PayPal directly to perhaps a forgotten giftcard or a different credit card) afterwards is a nice touch, mostly because it’s a helpful consumer feature that will not have any impact on the retailer. It also suggests that retailers will be able to enjoy various payment services in a mobile wallet environment, without having to do any meaningful changes to IT systems.

But that bypasses the crucial question: How is a retailer to choose among these digital wallets? PayPal’s core answer is that its system is device-agnostic, as opposed to Google only using Android (for now) and ISIS offering nothing live now but is expected to be similarly hardware-limited. Apple has yet to weigh in one way or the other.

Not only will PayPal—assuming it ever gets any live trials made public, something that only Google has accomplished thus far—support all smartphones, but Nayar said it could support non-smartphones, too. That said, he conceded that functionality on non-smartphones would be very limited.


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