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Why Did PayPal Buy Fig Card? Find Out

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The word is that once upon a time, eBay’s PayPal tried to buy Jack Dorsey’s Square. Knowing Dorsey’s ambition, it was obvious that wasn’t going to work out. What was clear though – PayPal knew that it had to get a piece of the non-web transaction business and jump on the big “people-to-people economy” trend that is starting to gain traction.

Today, the company announced it’s buying small Boston-based mobile-payment startup Fig Card, who’se founders Max Metral and Hasty Granbery will go to work for eBay’s Paypal division.

The FigCard frames itself as “a new way to use your fancy iPhone to pay for things”– (note – you can also use your fancy Android and select fancy Blackberry). Consumers download the app and use it at participating retail stores. Merchants accept the mobile payments in stores through a $5 USB device that plugs into the cash register or point-of-sale terminal. The cashier never sees the customer’s credit card number.

The acquisition fit’s into Paypal’s strategy to acquire  existing technology and talent to help build it’s mobile and platform businesses. In a blog post announcing the deal, Peter Chu, PayPal’s senior director of mobile, local and new ventures said Fig Card fit Paypal’s vision of a future that not separates payment from the PC.

We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal – in the future,  transactions can be as smart as a computer and not as dumb as paper. We won’t need our physical wallets. We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy.

Keith Rabois, who runs Square and was a key executive during the pre-eBay days at PayPal recently told us his company was “going after 26 million folks who are not merchants in a classic sense.” I guess, so does PayPal.

3 Responses to “Why Did PayPal Buy Fig Card? Find Out”

  1. Philip Cohen

    Who gives a Fig?

    PayPal—eBay’s Ultimate Savior?

    I have no doubt that if and when the retail banks decide they want to take the final step (and probably the increased risk and therefore the extra work involved) and offer a simpler online payments process also based upon their customers’ unique email address identifier, similar to that which PayPal offers, to the many merchants who may otherwise not want (or may not qualify for) a credit card merchant account, and the participating banks offer that service in their usual professional manner via the likes of their partners Visa/Mastercard, the fundamentally clunky, unprofessional PayPal—outside of whatever is eventually left of eBay—will undoubtedly quickly disappear into the history books—there is simply nothing surer than the sun will rise in the morning.

    PayPal at POS.

    Unless PayPal issues every PayPal user with a swipeable credit/debit card—in reality a (GE Money Bank—ugh!) Mastercard—PayPal simply cannot compete with the retail banks’ “cards” at POS. PayPal is otherwise as clumsy at POS as “card” transactions presently are relatively clumsy at online transactions. PayPal’s only advantage is its connection to the now sickly eBay and its use of the unique email address identifier which very well suits online transactions only. Regardless, why would anyone want to leave funds idle in a PayPal account so that they could use PayPal at POS? Why would any off-line merchant risk providing goods/services and then have to wait possibly weeks/months before actually being able to get their funds from the “no responsibility accepted” PayPal process? Think about it for a moment: Frightening. Then there is always the burning question, how can PayPal manage the credit/transaction risk without knowing the users the way that the retail bankers, ultimately at each end of the transaction, know their customers?

    eBay’s Chief Headless Turkey is seriously delusional if he truly thinks that PayPal, outside of the dying eBay Marketplace, will be eBay’s savior in the long term.

    Enron / eBay / PayPal / Donahoe: Dead Men Walking.

  2. Tracy Hall

    Fig is as unlike Square as it is possible to be – Square uses the iPhone to **TAKE** payments (ie WITHOUT terminal or POS), Fig uses the iPhone to **MAKE** payment (WITH terminal or POS – I.e., traditional retailers)