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Summary:

PayPal has made headlines about the business arrangements it’s secured for its in-store payment system. But the consumer strategy will be just as important. PayPal told me the marketing campaign for consumers began in the last week and will ramp up as PayPal adds more retailers.

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PayPal has made a bunch of headlines about the business arrangements it’s secured for its in-store payment system, including the news Thursday that it had lined up 15 retailers along with major point of sale hardware partners. But it hasn’t really talked much about its marketing campaign for consumers.

In a call with Don Kingsborough, PayPal’s VP for retail and prepaid products, he said the play for consumers began in the past week and will be ramping up in the coming months. He said it started with emails to existing PayPal consumers, inviting them to activate their accounts for in-store check-out.

“We’re starting with our best customers that we had lots of traction with,” Kingsborough told me in a phone interview. “They know how to use us online. We have 17 million who know how to use us on mobile. Now we have to get to the more than 100 million users to use it in store.”

Kingsborough said the email marketing will be joined by digital, TV and “lots of different kinds of media.” The roll-out with 15 retailers along with initial partner Home Depot is also part of the larger plan to make consumers aware of PayPal’s in-store payment product. Kingsborough said getting wide acceptance at retail is necessary first to help drive adoption. Once consumers start to see the payment option in store and retailers starting incentivizing its use, shoppers will start using the service. He said many of the early retail partners were selected because of their ability to help push the story with customers.

“We went in first with retailers with more youth-oriented, mobile-engaged people who use social networks in a big way,” he said. “The reason you want to go after them early is that it’s a way to spark viral aspects.”

PayPal still faces a big challenge in getting consumers to adopt a new payment system. But it is rolling out a number of features this summer including deals, loyalty and flexible payments aimed at helping consumers understand that PayPal is providing more than just a payment alternative. Kingsborough said the consumer outreach will go hand in hand with more retail distribution.

  1. Philip Charles Cohen Friday, May 25, 2012

    So, eBay’s just bought PreyPal’s way into another 15 retailers. What a total waste of eBay shareholders’ funds …

    Read about it and weep, John Donahoe …

    In addition to Visa’s V.me, there is now MasterCard’s PayPass digital wallet soon to arrive; another perfectly logical extension to the real banks’ traditional, professional, payment processing systems (and you don’t have to ditch the plastic) …

    Goodbye clunky PreyPal, I can’t say that it has been nice knowing you …

    “When Do We Start Calling eBay A [Failed] Payments Company?”

    http://forums.auctionbytes.com/vbulletin/showthread.php?t=24590

    And, just for a laugh then, some comment on PayPal’s off-eBay products: “The New Way To Pay In-Store” (at Home Depot), PayPal Here, SmartPay, PayPal Digital Wallet, PayPal Debit MasterCard, PayPal Local and Watch With eBay …

    http://forums.auctionbytes.com/vbulletin/showthread.php?t=24611

    eBay / PayPal / Donahoe: Dead Men Walking

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  2. This is a really disruptive move, brilliant, because paypal intermediates between you and the retailer, which increases your security. You only have to trust paypal, not every retailer you deal with. Plus it’s modern. Like the article says, the young market will appreciate it.

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    1. Kevin Hickey Monday, May 28, 2012

      Beyond, “modern” how is this different than Visa or MC? or did you forget your /s?

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