PayPal’s App Update: A Push For Physical Acceptance

By Ben Carsley and Pete Rizzo (@pete_rizzo_)

PayPal continued its push for offline acceptance yesterday when it released new versions of its iPhone and Android mobile payments apps.

The launch marked the fifth overhaul of PayPal’s app since it first launched in 2008, and it appears to be one of its most substantial upgrades. Among PayPal’s new or updated mobile functionalities are; a new “Shop” feature that lets users find nearby merchants that accept PayPal; expanded order ahead functionality, allowing users to place orders via mobile and then pick-up in-store; integrated offers and deals; and the ability to check-in to certain restaurants to pay and tip at the table via mobile device.

According to Anuj Nayar, PayPal’s senior director of global initiatives, the upgrade represents the further muddling of lines between commerce channels.

“The reality is that the lines between all the different types of shopping, from a consumer point-of-view, are gone. There is no ‘e’ before commerce or ‘m’ before commerce: it’s just shopping, it’s just commerce,” Nayar told

As such, a big part of PayPal’s update is centered on making the shopping experience “seamless” for users. With order ahead, they don’t need to wait in lines. With the new “Shop” tab, they don’t have to search for acceptance. And with its new integrated offers, the app lets consumers save and redeem deals automatically through its wallet functionality.

Likewise, PayPal’s app update is designed to make it easy for users to manage their payments. The app now allows users to add funds, get deal notifications and view their transaction history, as well as select which payments method they’d like to use before every purchase: a feature on which Nayar placed special emphasis.

“If I’m at Home Depot, I want to use my credit card. But if I’m at Jamba Juice, I want to make use of my bank account,” Nayar said. “When you make a payment, right front-and-center is the ability to change however you want to pay on a transactional basis.”

Those payments choices include what Nayar termed as “the biggest new development” to hit PayPal’s app yesterday: integration with Bill Me Later, which gives the mobile app credit functionality. Nayar said the application process takes “about a minute,” essentially providing users with a decision by the time they’ve picked out the item they want to buy. PayPal makes the decision on the credit extension, and merchants simply see that it was a transaction made via PayPal.

According to Nayar, Bill Me Later’s mobile functionality will expand for the holiday season, mimicking some of the promotions the service offered online during last year’s holidays.

The updates represent a larger strategy that PayPal has been putting in place for some time: Getting consumers to use PayPal as more than just an online payments tool, but rather as their preferred payment vehicle of no matter where or how they’re aiming to make a purchase. And so far, the analyst and media reviews of PayPal’s update have been largely positive. 

Whether the app becomes as popular with consumers remains to be seen, but these upgrades could position PayPal for further penetration into the world of physical sales.