PayPal’s Decade In Mobile

A year and two months before the world would be introduced to the iPhone, the notion of buying anything on a mobile device other than a ringtone — much less using it to actually initiate the purchase and pay for the item — was nary more than a gleam in the eye of an innovator.

It was also the day that PayPal launched mobile payments — Text to Buy.

“What [PayPal] had then was a great way to buy or give money to a friend or charity via text message,” Anuj Nayar, PayPal’s global head of product communications, told PYMNTS in an interview on PayPal’s 10-year mobile anniversary. “Even that was a little ahead of its time since it was still a full year ahead of the iPhone. Even then, mobile payments on the first iteration of the [iPhone] was pretty theoretical as there were only 15 apps at first.”

It was a pretty clunky experience. Consumers saw a product with “Text to Buy” next to it, entered in the code and waited for PayPal to call the user back with an authorization to purchase and use PayPal to pay, of course. But hey, it was a toe in the water with a cloud-based experience that leveraged what was available at the time — phones that could text.

Fast forward a decade, and as the saying goes, PayPal and mobile payments have “come a long way, baby.”

“And so, you see today 30 percent of our traffic now is on a mobile device,” Nayar noted. “The whole world has opened to the possibilities of mobile. It has changed the nature of how most people have done so many things. It is the fastest-adopted technology in history.”

And that “hockey-sticking,” Nayar noted, can be seen in PayPal’s mobile results over the last decade. Though the firm saw a slight bump in its mobile volume when it first dropped its PayPal app into the Apple Store (and later the Google Play Store) a decade ago, that little bump has become $175 billion in mobile payments volume — most of which, Nayar notes, has gone across the digital wires in the last two years.

In 2015, PayPal’s total payment volume was $282 billion from 4.9 billion transactions — 1.4 billion of which were mobile-initiated.

“The [mobile] model is a game-changer, not just for commerce but for everything anyone is doing,” Nayar remarked.

All in, mobile was up over 44 percent year over year on the platform, and Nayar notes that that growth trajectory is forecasted to keep gaining steam.

“Mobile is a fundamentally different way to shop, and we see a greater and greater percentage of our business moving to the mobile device, which is a sign that it is getting easier and easier to actually finish a transaction on a mobile device, as opposed to just starting one.”

The last decade has also seen PayPal bolster its core platform through acquisitions that extend and enhance the mobile payments experience: the 2013 acquisition of payments processor Braintree (and in the deal  Venmo for P2P and the recently launched Pay with Venmo in stores); the 2015 acquisition of Xoom for mobile remittances, including the opening of a corridor in Cuba;  and the 2015 acquisition of Paydiant to enable mobile payments in store and Cardless Cash payments at ATMs.

One thing is clear even as mobile payments has become increasingly more congested with new players hoping to capitalize on the opportunity: What was once thought of as an exception to the rule for how people shop has now become the accepted conventional wisdom about how it will happen.

“At some point, if you are going to spend more than $20, you have probably touched the Internet at some point, and increasingly, that’s happening on a mobile device,” Nayar noted.

So, what does the next 10 years look like?

Using the PayPal digital platform to connect everyone in the world to commerce — and those who enable it.

“About 85 percent of the world’s transactions are still cash. We don’t think that it’s about betting on any one piece of tech but rather having the solutions that allow consumers to connect with each other and consumers to connect with merchants anywhere on the planet,” Nayar emphasized.

PayPal believes that it’s well-positioned to do that but not just because it has innovated over the last 10 years to deliver the use cases and innovations that make digital and mobile a value-added experience for people and businesses.

“At the end of the day, every company has its DNA, its core value proposition,” Nayar told PYMNTS. “PayPal has 17,000 employees who spend every single day thinking about payments first and how we can enable commerce for anyone, regardless of the device they have access to or the technology that device enables.”

And that focus, Nayar noted, is what will power PayPal over the next 10 years.

“We’re just getting started,” he concluded.