PayPal’s Plans for Taking on Visa and MasterCard at the Cash Register
PayPal is hosting an event at its San Jose headquarters this morning to announce the next batch of retailers that are adopting the company’s in-store payments solution.
So far, it has deployed at 2,000 Home Depots and has plans to be at 20 major retailers by the end of the year.
Stay tuned as we cover the announcements live.
10:10 am: “Midmarket businesses represent a third of the U.S. economy, and we looked at our capability and decided to partner rather than build,” explains PayPal president David Marcus.
So rather than ripping out their existing systems, the new stuff integrates with existing point-of-sale systems.
The POS software partners are: Vend, Erply, shopKeepPOS and Leapset.
That plugs PayPal into 50,000 merchants across the country, Marcus said. And that’s added to VeriFone and Equinox POS terminal manufacturers, announced this morning, in addition to an existing relationship with Ingenico.
Cue video of the owner of a PayPal-enabled shop full of cute dresses, who says she likes seeing her customers’ faces on the register, emailing them receipts and knowing their purchase history.
Next topic: large retailers. Don Kingsborough, VP of retail and prepaid, takes the stage.
Physical retail and offline retail is no longer about “location, location, location,” but instead about access to customers, Kingsborough posits.
Kingsborough pokes fun at Google’s mobile wallet pronouncement last year in New York (not by name, but it’s obvious), and other competitors’ tests, saying PayPal is much closer to ubiquity.
PayPal’s big partner so far has been Home Depot, so it trots out the company’s Dwaine Kimmet, treasurer and VP of financial services.
10:28 am: Kimmet says PayPal has been a good partner for 1) improving and speeding up checkout 2) combating bank card acceptance costs and 3) providing value to everyone.
That last one sounds really vague, but he’s elaborating. Kimmet gives the example of how text messaging around transactions gives both added security as well as convenience for customers.
Kingsborough is back to give a list of the first 15 retailers, and says some of them will be launching in the next few weeks. This is the meat of the announcement we were expecting. Office Depot, American Eagle Outfitters, Barnes & Noble, Jamba Juice, Foot Locker, J.C. Penney, Guitar Center, Jos. A. Bank, Aeropostale, Nine West, Advance Auto Parts and TigerDirect are the ones I could get before the slide changed.
Now for a string of video testimonials from people like J.C. Penney CTO Kristen Blum. But CEO of Jamba Juice James White is here in person.
White talks about the convergence of online and offline, customer satisfaction, incremental traffic and brand strengthening, while my mind wanders to flavors of smoothies.
The offline launch will enable PayPal to tap into a market that’s 17 times as large as what it has today, Marcus says.
That was short and sweet. PayPal had given a target of 20 major retailers by year’s end, so announcing 15 in May in addition to Home Depot is pretty far along.
10:55 am: Okay, got the full list of retailers. Here they are: Abercrombie & Fitch, Advance Auto Parts, Aéropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, J.C. Penney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms To Go, Tiger Direct and Toys “R” Us.
That list includes some overlap with Google Wallet, including American Eagle Outfitters, Foot Locker and Jamba Juice. It seems clear that retailers are willing to try multiple strategies to see what works best.