One of the more exciting companies at Mobile World Congress 2014 in Barcelona has to be PayPal as they announced their payment solutions are built into Samsung Galaxy S5 allowing you to pay with your finger. Also the PayPal app is built into the Galaxy Gear smartwatch and phones – allowing you to check in at retailers at standard check-out locations or using PayPal beacon. This is the first instance of PayPal in the wearable tech space BTW. The way it works is the first time you walk in to a retailer, you give the beacon permission to bill you and after that, they check you out as you walk by. Your face becomes the password as it shows up for the cashier to verify as you leave.
Retailers can also tune beacon to have less or more range depending on how many checkout lines they have etc. And cell phones don’t need to be connected to the internet to process payments – the beacon connects the phone to the internet instead.
I had a chance to sit down with John Lunn Global Director of PayPal Developer Networks at PayPal and I asked if he thinks the company wil be a leader going forward in the mobile payment space. He answered that the company already is, saying, “We processed 15% of worlds mobile payments which is $27B. This is up from $14B and $6B the years before.” The company is focusing on providing experiences to make people’s lives better he said. We have always been anti-NFC he stated, we don’t think it makes things better, just faster. He continued to say, “The worse thing about shopping is paying, so why do you wait in line to do it?” He said, [With our system,] when you enter, your face is your password and when you leave, you smile and wave to authenticate/pay. I asked about the biggest challenge the company faces to which he replied, education. Consumers need to know why they should do it and how to do it.
Brick and mortar stores know next to nothing about you compared to online where they know everything about you he stated. Now, customers will be able to have salespeople waiting with the pair of jeans they tried on the day before. This is a better experience for all involved he proposed.
I asked him about virtual currencies and he said, they aren’t ready for mainstream. He continued by saying, “How do you price it?” He stated they are too hard to use as a currency with their current level of stability. They need regulation or a controlling force. Finally, he said he loves the idea but we can’t use it at the moment,
I asked about competion from Google, Apple and others and he said, “We do payments well. We aren’t a search company. We don’t make hardware. We don’t have a secret agenda.” Finally he said, “This makes a big difference on how you develop products.”
I asked if they toyed with virtual currencies at all – they haven’t. He said, They are involved in mobile payments and every currency is electronic [in their system] anyways – so there isn’t a huge amount of difference.
In other recent news, the company announced recently its new reationship with Deutsche Telecom in addition with 250 previous carrier relationships allowing mobile payment simplicity on their networks. Also, there is a new mobile SDK – a library for Android or iOS. It allows you to use the native app to pay. You don’t need to go to a separate website each time to authenticate. You authenticate once and thats it.
As payments move to mobile, PayPal is certainly positioned well as an independent player to support many vendor ecosystems and carriers as a flexible solution which not only streamlines payments but makes the shopping process similar to online in terms of efficiency and customer experience management.