By Kate Knibbs | Mon Jan 23, 2012 12:48 pm |
PayPal is expanding its services and challenging rivals with its new in-store payment system, as the company broadens its horizons beyond traditional online shopping.
The Ebay-owned in-store payment system began a trial run in 51 Home Depot locations in San Francisco, and will expand to all Home Depot locations and 20 other major retailers around the U.S. later this year.PayPal links to checking accounts or credit cards, and lets users make payments without sharing financial information. In-store customers give retailers their mobile number and PIN to pay with their PayPal account, removing the need to carry around a bank card. Paypal also offers a card for those who want to pay with something tangible. "This is the beginning of a fundamental change in the company," said PayPal director of communications Anuj Nayer. "What we are finally rolling out will ultimately be, in part, an international phenomenon. It's a change in how retailers and consumers are going to connect." PayPal offers lower fees than traditional credit cards, and allows users to change their method of payment after they make a purchase. It will offer deals at specific retailers, creating discounts for customers that scan prices with their mobile phones. The company stresses its emphasis on enhancing the consumer experience. PayPal's foray into stores is part of its strategy to expand beyond its Web-based markets, and builds on its intention to change the way customers shift purchasing and financial information to mobile devices. The company already offers a way for Android phone owners to exchange money with a tap of their phone, and last fall touted its own mobile payments systems, which will released later this year. Amazon and Ebay already use apps that allow customers to scan and buy products on their mobile devices in store using PayPal. With the move into retail stores, mobile price scanning deals will continue to entice consumers. Phone makers will also boost e-wallet usage with their Isis initiative, which will allow users to pay for goods and services in-store via cell phones, and Google is slowly expanding its Wallet service to more phones as well. Analysts anticipate mobile payments will rise to over $670 billion by 2015, underscoring what is in stake for PayPal's successful transition to the mobile market. Its decision to target in-store payment illustrates the company wants to move beyond the Internet, and re-brand itself as a general payment system to better compete in the changing shopping landscape and grow beyond its Web origins.
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