Mobile Payments

Don Kingsborough, VP retail services, PayPal, San Jose, Calif.

Consumer use of smartphones and tablets is helping to drive the growth of mobile transactions in retail. Chain Store Age spoke about the growing trend with Don Kingsborough, VP retail services, PayPal, which recorded $14 billion in mobile payments in 2012 and expects to exceed $20 billion this year. According to Kingsborough, PayPal is well-positioned to tap into mobile payment growth as it already has three key elements in place: a large consumer base (55 million-plus in the United States), a network of merchant partners and "ecosystem" partners.

Apart from the elements you referred to above, what else is key to getting shoppers to use a mobile payment option?

Additionally, you need to offer value. Tapping and paying today is no different than swiping a card, but creating value is key.

How does PayPal create value?

By offering shoppers coupons or rewards and by creating unique experiences that add convenience or allow them to save time. For example, we are working with Jamba Juice to enable people to order ahead via the PayPal app. After people order, they can go to Jamba Juice and simply pick up their order and walk out. They already paid so they don't need to wait in a line.

What about retailers — are they on board with digital wallets?

I've met with more than 200 large retailers around the world, and every one of them is working on mobile payments because the people who shop at their stores have a desire to use digital wallets that work in-store, online and on a mobile device.

So yes, retailers are on board!

About how many retailers are using PayPal's payment solution?

At the close of 2012, we had agreements with 23 retailers to enable their customers to pay with PayPal in-store, which translates to PayPal being available in more than 18,000 locations in the U.S. And this spring, PayPal will be accepted in millions of more locations through our collaboration with Discover.

What is PayPal's approach to mobile wallets?

PayPal is a 'virtual wallet' — accessible from any number of form factors (card, hands-free, mobile bar code, mobile check-in, etc.), and that works wherever the customer is and however the customer wants to pay. PayPal offers users a choice of how they want to pay in a simple, fast and secure way.

Does PayPal's experience in online payments give it an advantage here?

We have 55 million customers in the U.S. and 123 million active customers worldwide, and that alone gives us a great advantage. These people want to use PayPal, and we are giving more options to do so both online and in-store. Additionally, a big part of the industry lead that PayPal currently has is the added layer of security that has always been provided. Our approach overcomes a key barrier to other digital wallet models, which require consumers to put payment credentials in their phone, thus opening up security concerns.

Do retailers have to buy new hardware to accept the PayPal solution?

PayPal works seamlessly with a retailer's existing point-of-sale hardware because it is an open platform that is both device- and platform-agnostic. This simple integration allows for a checkout at the register that is simple, fast and secure.

How will PayPal's new partnership with NCR help expand its digital wallet footprint?

We are working with NCR to leverage their strong footprint with retailers and the hospitality industry and encourage mobile and digital payment adoption.

In the first phase, NCR will integrate PayPal mobile payment options into the recently announced NCR Mobile Pay application and NCR Aloha Online Ordering. With this integration, PayPal will be a payment option and allow consumers greater choice for simple, fast and secure purchases, alongside credit or debit cards. Consumers will also be able to use the PayPal mobile application to locate, order ahead and "check in" at participating NCR Mobile Pay merchants to access the same functionality.

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