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eBay CEO Pooh-Poohs NFC, Says Chains Won’t Permit It
And with the card brands more than willing to accept—although certainly not embrace—almost all of the key efforts, an argument could be made that that will provide the comfort-food quality NFC on its own lacks.
All of that said, PayPal really is the most traditional payment player in the space, certainly less disruptional than Google, Apple, ISIS or Square. But it’s also likely to be the least feature-rich of the group. With all of the excitement of mobile payment, will boring win the day?
The complicating factor is consumers. Major chains would certainly prefer to keep things as comfortable as possible, but with Google’s Android devices and Apple—plus perhaps Square—pushing hard on the consumer side, will that force the retail hand? What effectively killed standalone contactless was not—initially, at least—retailer apathy. It was consumer apathy.
If consumers come into the store wanting to use those other devices, what retailer would resist? This might be one of those technology decisions that really will be dictated by customer demand. If so, end-user campaigns from Google and Apple may override PayPal’s comfort-food campaign.
PayPal’s in-store payment situation has two distinct flavors. When PayPal refers to mobile payment today, it’s referring to what is essentially its veteran E-Commerce payment mechanism tweaked ever-so-slightly for mobile.
It’s an in-store mobile payment only in the most narrow of terms. It’s mobile to the degree that almost any E-Commerce site can be viewed on mobile. If consumers go to a major E-Commerce site and pay for a product with PayPal, that’s E-Commerce. If they happen to do it while standing in a Best Buy, it’s technically in-store. PayPal also has a mobile app, but it’s just a shorthand version of its E-Commerce payment functionality. It generates a lot of revenue for eBay, though.
The in-store payment app being discussed for the end of the year and next year would be a direct POS interaction capability, but PayPal has said almost nothing about the nature of that POS interaction.
Given the ridiculing of NFC, the most likely scenario is a POS scan of a mobile-displayed barcode, similar to what Starbucks and Target have been doing with their mobile applications. eBay’s recent purchase of Zong is another possible approach. That involved giving the POS associate a mobile-phone number and the sale is then confirmed with a text back to the phone.
-Marc
July 21st, 2011 at 9:11 am
Do anyone see the oxymoron in John Donahue statements?
Here is a company that started off as x.com and was originally shunned by large established corporations and owe x.com/Paypal growth to the long tail of individuals and small businesses using Paypal to pay for auctions. Now we hearing Mr. Donahue speaking of “large” retailers acceptance of new technology such as NFC and he is now shunning NFC in the same manner Paypal was shunned. Interesting!
Again, the overall problem I see in US-based discussions of NFC is too much focus on the “big boxes” and large retailers. It is highly interesting how NFC and mobile payments are growing so fast in emerging nations among small to medium size businesses but here in America – big banks, big retailers and big telcos.
Now I said my peace, I have to go back into stealth mode and watch this US-Based approach run absolute counter to how the rest of the world is approaching next generation retailing..
July 21st, 2011 at 1:56 pm
How many times does our industry have to go through the “POS revolution” hype? Anyone remember when STAR brought PIN debit to the POS in the West? They subsidized adoption (consumer coupons) and interchange ran backwards! (Issuers paid merchants.) In my view, that was the LAST big change we’ve seen at the POS, and that was the mid 80s (and took a solid 10 years to catch on). Since then, both chip and NFC have floated up from the depths and sunk any number of times.
I agree with the author of the article. Unless consumer behavior drives it (and that behavior is currently brand-controlled by the associations, and is solidly magstripe) no big merchant is really going to care. The last payment “innovation” (if you can call it that) they jumped on was closed-loop prepaid. That seriously drove revenue and came with breakage as an added perq.
C’mon folks, what’s going to break the chicken and the egg deadlock? PayPal? Mobile? Really? Anyone want to bet on either of these horses in the US?
July 21st, 2011 at 2:09 pm
John Donahoe is a visionary leader. By any means it is not an easy task to learn and steer a very large organization like eBay. He is going a great job! When John speaks everyone listens and appreciates his thoughts.
August 17th, 2011 at 10:09 am
With Visa, Master Card, American Express, banks and Google all expected to offer mobile payment products over the next few years, Mr Donahoe’s statements regarding PayPal mobile hardly go beyond action.
What Mr Donahoe is doing is trying to influence the marketplace before the marketplace has an opportunity to test drive competing products.
Mr Donahoe may impress retailers, but impressing consumers who have had miserable experiences with PayPal in the past is not likely to happen.
PayPal has been and still is engaged in practices which infuriate their customers such as placing arbitrary holds on payments received by sellers on and off eBay. The numbers of sellers effected by this ongoing payment hold processes grows quarterly, as if PayPal is headed towards becoming an escrow service, instead of being a payment service.
Tens of thousands of sellers have been hit with these arbitrary holds and alienated to the point that they have stopped doing business with eBay AND with PayPal.
If Mr Donahoe believes that consumers that have been antagonized to the point of closing their accounts because of poorly thought out company policies are going to suddenly accept PayPal back into their lives with open arms simply because PayPal might be accepted at Target or WalMart, he has much to learn.