Mobile Payments

PayPal’s Global Mobile March

“Consumer Choice” is PayPal’s mantra, brought to life last week as it unveiled a redesigned app that put what customers use and want most right up front.

And today (Feb. 22), PayPal kicked off its presence at Mobile World Congress with a series of announcements that makes it clear that PayPal intends to double down on that vision, which is less about buying stuff and more about managing money in a digital world.

PayPal says it intends to do that by complementing its own global footprint with deep-level partnerships with third parties that expand the depth and breadth of its reach.

“We have a tremendous opportunity to transform commerce and financial services, and mobile is at the center of that evolution,” said PayPal CEO Dan Schulman. “We are committed to giving people flexibility and choice in the ways they move and manage their money. Leveraging our mobile scale and leadership, platform-agnostic approach and partnerships, PayPal is uniquely poised to leverage new value propositions. We believe the financial system should be more seamless, secure and affordable to drive the hopes and aspirations of people outside the traditional financial system.”

The first of those partnerships was teased last week when it was reported that PayPal had teamed up with Vodafone in Europe to enable Vodafone Wallet users to use those wallets in-store at places that accept NFC payments: retail locations, stores and restaurants. The partnership makes it possible for PayPal users to enable contactless payments for goods and services at the point of sale, too.

The rollout begins in Spain and officially went live today — giving every Spanish Vodafone subscriber the chance to integrate PayPal into their mobile wallet to pay in-store via NFC.

PayPal also announced a deal with América Móvil, the largest carrier in Latin America, to bring the same capabilities that it’s providing with Vodafone by building PayPal directly into its wallet.

“Hundreds of millions of people who have European Vodafone mobile subscriptions that already have the Vodafone wallet can now add PayPal. But it’s not just PayPal. They can pay whatever way they want to,” Anuj Nayar, global head of product communications at PayPal, told MPD CEO Karen Webster in an interview.

And that’s just the beginning, he emphasized, stressing that “there is going to be a lot more growth” in that area.

Again, as PayPal has stressed in its most recent app overhaul pitch, it goes back to consumer choice and enabling consumers however, whenever and with whatever they want to pay.

PayPal Goes NFC

And speaking of that app revamp, what PayPal didn’t reveal last week was the NFC capabilities that it would be adding to its app, starting with customers in the U.S. and Australia this spring. Schulman also discussed this feature at MWC.

Like many in the payments ecosystem, PayPal believes that NFC is only one of many ways that consumers and merchants will engage around payments. But if that’s how consumers want to pay, then PayPal wants to ensure its products can enable that option.

“If people want to use NFC to pay in store, then they can,” Nayar emphasized.

Xoom’s Next Mobile Money Footprint

But PayPal’s day of announcements didn’t stop there, continuing with an update about the newest company under its umbrella: Xoom.

This announcement marked what could perhaps be its biggest of the day: PayPal and M-Pesa are teaming up to enable the automatic deposit of remittances into Kenyans’ M-Pesa accounts via Xoom.

What this deal secures is the ability for a Xoom user in the U.S. to directly deposit funds into an account of friends/family in Kenya via their M-Pesa account — without the need of another means to gain access to those funds.

This follows on the heels of a similar announcement last week with a new bill payments service in the Philippines that allows people in the United States to pay the Smart and PLDT postpaid bills of their friends and family in the Philippines online, thanks to another third-party partnership between Xoom and PayMaya Philippines.

As Webster points out during her conversation with Nayar, what PayPal is doing through its newfound third-party partnership deals is to embed PayPal’s capabilities all over the world by embracing the idea of “mobile everything.”

And, in regions outside the U.S., the way to get to “mobile everything” is through the telcos who have secured the customer relationship in strong and powerful ways.

The Power Of Partnerships

It’s a shared ambition and critical success factor for payments: massive distribution and getting to scale. And for the hundreds of millions of consumers who are turning to mobile for their financial needs — to pay bills, to pay a merchant, to buy in-app, to pay online — PayPal wants to give those third-party platforms access to all of those commerce options mentioned above. And vice versa.

“The reason the telcos want to work with us is because we are the only payment third-party platform that gets them ubiquity everywhere the consumer is using their mobile device,” Nayar said. “They want to work with one partner to get all of that,” Nayar said.

PayPal is also working with telecom providers in Mexico (Telcel) and Brazil (Claro) on their digital wallets to help their more than 140 million active users manage and make purchases via mobile devices.

Nayar emphasized that PayPal is not trying to usurp existing relationships, rather simply providing consumers with the choice that PayPal feels that they should have in managing their money.

“We want consumers to do what they are most comfortable with. We believe that PayPal is in the strongest position to bring a global network of assets to allow those consumers to do that in a way that hasn’t been seen before,” Nayar explained. “Nobody else is doing this. Everybody else [in mobile payments] is doing a point solution.”

Nayar tells Webster that consumers are moving between multiple environments fluidly, which is why PayPal is focused on so many third-party partnerships.

“It’s about expanding ubiquity,” he says. “If people see digital wallets offered as a familiar payment mark, they gravitate toward it. That’s key.”

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