Today’s announcement that PayPal has partnered with Discover Card, another closed loop payment company – but in retail, could mark a game changing scenario in the land grab for alternative payments in retail. While Discover certainly doesn’t have the reach of Visa and Mastercard, it does provide a significant boost to PayPal’s merchant acquiring network. This is a smart move for both companies since Discover is the network that lags behind the others in terms of acceptance and issuance, and PayPal knew that it couldn’t win the game by organically acquiring its merchants.
Still, as an ex-PayPal Mobile exec and as someone who has used the PayPal payment at Home Depot, I believe the user experience is flawed. Having the consumer type in their mobile number and PIN is an experience that derives from a technology solution that stands without the need for partnerships and significant POS upgrades rather than the right consumer experience. The problem with the mobile number and PIN method is that it goes against the grain of the user behavior everyone else in the industry is promoting (card swipe, bar code off the phone, and NFC). This leaves PayPal alone in building that behavior which is very heavy lifting, and one that would require a SIGNIFICANT value proposition to the convince consumers to try – a value proposition well beyond what is provided by PayPal today. Can PayPal pull this off? PayPal has never been known to really understand their consumer base. They never had to as they could ride on the coat tails of eBay to get their first 50+ million users. Or will PayPal finally shift into the technology handshakes that are promoted by the industry? Starbucks and the airlines finally got us all used to the barcode on the phone. Will PayPal finally adopt this handshake? Or do they believe that the laser required to read the bar code is too much of a hurdle for its now Discover merchants to buy into (let alone NFC POS readers)?
While the Discover deal is a huge boost on the merchant side, it’s now time to focus on the consumer. Let’s see whether PayPal makes a drastic change to the consumer experience as well. An Apple deal would be the perfect marriage, but perhaps too uncharacteristic for Apple…
- Just reported the misuse of the government’s twitter account to attack a private corporation for political purposes… twitter.com/i/web/status/9… 1 week ago
- RT @TheTweetOfGod: I'm, like, really omniscient. 1 week ago
- RT @NickKristof: How the Russia Inquiry Began: A Campaign Aide, Drinks and Talk of Political Dirt nyti.ms/2EiKatO The FBI investiga… 2 weeks ago
- RT @itswarrenbuffet: Habits of happy people: 1 don't show off 2 talk less 3 learn daily 4 help less fortunate 5 laugh more 6 ignore nonsens… 3 weeks ago
- Best Christmas song of all time... “what child is this”- Andrea Bocelli and Mary J Blige 3 weeks ago
- RT @RepAdamSchiff: A very powerful speech yesterday at a rally against the tax cut bill by my former intern and good friend, Ady Barkan, fi… 4 weeks ago
- RT @NancyPelosi: Incredibly moving argument against the #GOPTaxScam today from @AdyBarkan. #NotOnePenny https://t.co/nk9bJ7CbpC 4 weeks ago
- RT @RVAwonk: Just a reminder that there is nothing normal about the Senate (or the House) voting to pass legislation between the hours of m… 4 weeks ago
- RT @paulkrugman: Susan Collins says she's concerned about deficits, and that's why she's voting for the tax bill. I'm watching my weight, a… 4 weeks ago
- RT @brianklaas: Before destroying the remnants of democracy in Turkey, Erdogan purged judges, fired prosecutors who were investigating him,… 1 month ago