PayPal Plans Move Into Stores
PayPal, the online payment service, is serious about giving Visa, Mastercard
and Amex a run for consumers’ money and that includes moving into brick and
"If you’d asked me two years ago when would PayPal be in retail
environments, I don’t think I’d have said ‘by the end of 2011,’
the truth," wrote Scott Thompson, president of PayPal, on the company’s
blog. "Our developers started taking us there as soon as we opened our
platform in 2009 and now many of our developer partners, like Yorder and Bling
Nation, have delivered new services and products that are designed primarily
to reach consumers offline."
"These new ideas, coupled with the incredible
rise in connected devices and smart phones, have pushed traditional lines between
online payments and offline purchases together — opening up an entirely
new market for PayPal as the megatrends of mobile, social and local collide," Mr.
PayPal management, according to a Bloomberg News report,
believes that in-store transactions could help the eBay division double its
revenue by 2013.
"The top executives of Visa and MasterCard must lay awake at night wondering
how many years it’s going to be before these folks are substantially
impinging on their business," Bill Smead at Smead Capital Management,
told the news service.
PayPal announced this week that it has hired Don Kingsborough,
founder and former CEO of Blackhawk Network, the subsidiary of Safeway responsible
for placing gift cards in thousands of retail stores, to help bring PayPal
into physical stores.
"Don’s experience in consumer product development, technology, retail,
POS and merchant relationships will prove invaluable as we work to bring PayPal
to connected devices and the offline world," wrote Mr. Thompson.
- PayPal Welcomes Don Kingsborough – PayPal Blog
- PayPal Hires Blackhawk CEO to Oversee Push Into Physical Stores – Bloomberg
Discussion Questions: How will alternate payment methods affect retailing in the next five years? What form of payment do you expect to achieve the greatest penetration in the consumer market?