New PayPal App Expands Mobile Wallet
With its latest app update, PayPal has ramped up its efforts to get ahead in the mobile wallet race. The new release for iOS and Android devices offers a range of new and upgraded tools for shopping, ordering in restaurants and making mobile payments.
One of the more intriguing new features is the ability to order ahead at more than 1,000 local restaurants and cafes in the Eat24 network, with more on the way. PayPal began testing this service last year with Jamba Juice before rolling it out widely.
In a similar vein, the app now also allows users to pay their check at restaurants through a partnership with NCR. By checking into restaurants participating in the PayPal program, people can view their bill, add a tip and pay without having to flag down a waiter.
A new “Shop” tab shows nearby merchants that accept in-store PayPal transactions. “You can then 'check in' and open a tab with just a swipe. You can change how you want to pay right on the "check in" screen, meaning you’ve really got access to your entire wallet in the app,” stated a blog post by Hill Ferguson, VP, global product at PayPal.
The company says the new design also gives users the option of paying directly from their bank account, a credit card or PayPal balance. In addition, it has extended the Bill Me Later option to the app, providing instant credit for larger purchases.
To sweeten the deal, PayPal is touting in-store and online offers as well. The app comes loaded with $100 in offers from local U.S. businesses, which users can save to their PayPal wallet and redeemed at checkout.
In a blog post about the updated PayPal app, Forrester analyst Denee Carrington noted that no third-party mobile wallet to date has yet captured wide-scale adoption with both consumers and merchants. While Google Wallet has helped drive awareness of wallets, its NFC (Near Field Communication)-based technology has kept it from gaining traction.
With its upgraded app, however, “PayPal is poised to accelerate adoption by embedding value-added services designed to give consumers a reason to use the PayPal wallet across multiple categories and give merchants a reason to consider adding yet another payment method,” she wrote.
In a new report on mobile shopping and payments, BIA/Kelsey Senior Analyst Michael Boland argues that the app's “skip the line” feature for ordering will especially appeal to consumers by saving time, and to merchants by optimizing the flow of customers through their establishments.
Still, Carrington warns that cool new features won’t make the PayPal app’s success a slam-dunk. Specifically, the company has to demonstrate that its app is really a better alternative to existing payment methods like physical credit cards. It also needs to gain widespread acceptance by merchants to win over consumers. Finally, there must be clear value for business in terms of bringing in new customers, boosting loyalty or reducing costs.
PayPal has forged partnerships for in-store payments with national chains, including Home Depot, Barnes & Noble, Foot Locker and JCPenney. In April, it also struck a deal with credit card network Discover that it said would allow PayPal users to make payments at up to 7 million U.S. retail locations.