15 Comments

Summary:

Seven months isn’t a long time for most companies, but it’s practically an era in itself on the hyperkinetic mobile web. One thing that hasn’t changed in the last seven month is PayPal’s visibility on smartphones — it’s there, but it’s hard to find.

Seven months isn’t a long time for most companies, but it’s practically an era in itself on the hyperkinetic mobile web. Since last July, Motorola has launched the Droid and Google its Nexus One. Tens of thousands of new apps have been created — Apple even finally unveiled its iPad, which could potentially rewrite the rules for mobile apps entirely.

One thing that hasn’t changed, however, is PayPal’s visibility on mobile devices. Last July, PayPal opened a beta of its open platform so that developers could embed the payment system in their applications. In November, it went further, staging a developers conference to officially open the platform and setting up the X.com site for APIs and documentation.

If the timing felt a bit slow, the strategy was sound. As AuctionBytes noted, “PayPal believes payments for services is a bigger opportunity than e-commerce.” The Times’ Bits blog painted a clear picture of what it could mean:

PayPal imagines a future in which cash is obsolete, as are wallets. We will buy movie tickets by touching a movie poster on the street and order drinks from a touchscreen embedded in the bar.

It’s a nice vision. But in the months since, PayPal hasn’t really left much of a footprint in mobile apps. I’m still paying for movie tickets mostly with cash, and the Fandango app I downloaded asks me for my credit card number, not my PayPal account. PayPal is now an option in the iTunes App Store, but few people who entered a credit card number in iTunes years ago will bother to go back and change their settings in order to use it. In short, PayPal is very much on mobile devices, but pretty much invisible.

Instead, the buzz in mobile payments in recent months has been centered on Square, whose little white dongle turns an iPhone or iPod touch into a credit and debit card reader. Square is clearly a threat to point-of-sale companies like VeriFone, but by making plastic cards even more useful on the mobile web, it could be a big obstacle to PayPal as well. You can swipe plastic through a Square reader, but not your PayPal account.

PayPal has been at once a success story and a company that hasn’t quite lived up to its potential. Its revenue has grown 45 percent in the past two years, while eBay’s main marketplace business has seen revenue fall 1 percent. But PayPal has never really disrupted credit and debit cards in e-commerce. And outside of eBay, it hasn’t become a default payment method on other sites, notably Amazon.

The web is full of consumer complaints about PayPal, but my experience with the service over several years have always been positive. Even so, most of my purchases at Amazon or other e-commerce sites use debit card payments that bypass PayPal. It’s just a pattern I fell into and haven’t felt a need to change.

That pattern will be even more deadly on mobile e-commerce. Smartphones like the iPhone and the Droid – along with the most popular apps — resonate because of their simple interfaces. They are designed to eliminate tiresome choices. No one wants to choose whether to pay by credit card or PayPal each time they make a mobile payment. And that is PayPal’s challenge — not simply to be an option on the mobile web, but to be the default.

Related content from GigaOM Pro (sub req’d):

Why 2010 Still Won’t Be the Year of Mobile Advertising

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  1. Paypal stinks. I use Paypal as little as possible.

    In my experience, they have the WORST customer service of any company I have EVER dealt with.

    Sure, Paypal works fine but the true measure of a company is how they handle things when everything doesn’t go right.

    Have you ever had to deal with Paypal?

  2. ecommerce « Merchants Blog Saturday, February 13, 2010

    [...] you need to know for a small business on the web. « ach ecommerce February 13, 2010 Why Is PayPal Still So Hard to Find on Mobile Devices? – Gigaom.com As AuctionBytes noted, %26ldquo;PayPal believes payments for services is a bigger opportunity than [...]

  3. You just need a bigger screen to find it!
    http://www.showwx.com/

  4. Anuj from PayPal here.We just opened up our mobile payments library to developers. We hope that this will drive more adoption. Details can be found here.

    ttps://www.thepaypalblog.com/2010/02/paypal-to-introduce-easy-way-for-developers-to-accept-payments-in-their-iphone-apps/

    1. Thanks for posting that, Anuj.

    2. https://www.thepaypalblog.com/2010/02/paypal-to-introduce-easy-way-for-developers-to-accept-payments-in-their-iphone-apps/

      Anuj – does your solution allow for webkit mobile safari web apps to integrate in a similar fashion to your iPhone library? Android would then be able to take advantage of the same library.

  5. The state of mobile money/digital cash and proximity-based debiting via smartphones is woefully lacking here in the US.

    I rank technologies on my website (www.brianshall.com) and Paypal, which I have used for years, does quite well — except on the MOBILE score.

    Perhaps their slow response to embrace smartphones is ok in the US where we aren’t rushing to pay by mobile but it’s really ceding most of the global market to other players.

    Thanks for writing this.

    -Brian

  6. Naveed Anwar from PayPal here, apart from the blog entry that Anuj gave, here are some more details on x.com on how to be part of the program;

    https://www.x.com/people/PP_Mobile_Kent/blog/2010/02/02/paypals-iphone-library-is-getting-ready-for-beta

    by the way the correct URL for the blog that Anuj gave is

    https://www.thepaypalblog.com/2010/02/paypal-to-introduce-easy-way-for-developers-to-accept-payments-in-their-iphone-apps/

    Let us know how else we can improve. You can reach me at naveed@paypal.com, we are here to listen to your feedback.

  7. Curmudgeon Geographer Saturday, February 13, 2010

    I’m with sfmitch, when something goes awry with payments through PayPal it is an utter nightmare. I eagerly await someday for competition to PayPal’s service.

    It is my hope that Apple could implement something through its iTunes ecosystem. I’ve never had a bad customer service problem with Apple’s iTunes CS reps.

  8. I would sooner dispatch my payment to any part of the globe via USPS before PayPal(paysucks) sees my business. Most horrible customer service on earth. Period. Just stay away from this outfit.

  9. What prevents Paypal from making traction is their utter lack of integrity. If you are trying to compete in the issue of payments and banking, that attribute is non-negotiable.

    And far too many people find out that once something goes wrong with Paypal, its tantamount to having your money stolen by someone who cant and doesnt want to be contacted.

    Let’s put it this way: if there is any service that takes ONLY Paypal, I refuse to consume. Never mind the people commenting on websites, I think there is a large silent majority that doesnt trust them, either from firsthand experience or from just the instinctive understanding that a payments provider needs to demonstrate better visibility, concrete contact points and a commitment to integrity that goes beyond the law, especially as there is basically little or none in this arena.

  10. Venmo’s Simple, Loaded Premise: Pay Your Friends From Your Phone – GigaOM Tuesday, February 16, 2010

    [...] tried peer-to-peer mobile payments, and that more powerful companies are trying to do so today (PayPal fits in both categories). Amazon, for example, bought a very similar Y Combinator startup called [...]

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