Commentary

eBay Everywhere Is Here

Ebay-motors-app

eBay has been one of the most aggressive retail players in the m-commerce space, both through its lineup of category-specific mobile apps and its PayPal payments unit. The company has projected doubling its mobile transaction volume this year to $4 billion. Much of the spending on eBay is coming through PayPal Mobile, which is on track to handle $3 billion in payment volume in 2011, up four-fold from last year.

Impressive numbers, but what's especially interesting is eBay's strategy of being anywhere and everywhere consumers want access to one its services -- something like the retail version of the cable industry's TV Everywhere approach. During eBay's second-quarter conference call this week, CEO John Donahue said that if asked a year or 18 months ago what kind of company eBay is, he would've said "an e-commerce company."

advertisement

advertisement

"But the mobile device is absolutely lowering the boundary or blurring the boundary between online and offline," he added, noting how the technology bridges the two worlds through activity like in-store use of apps. As one example, he pointed to U.K.-based chain Pizza Express adopting PayPal Mobile as an in-store payment option so customers can pay their checks right from the table using an iPhone.

Taking a step further in that direction, Donahue said eBay will start testing "point-of-sale" innovations with a major U.S. retailer by the end of the year. In 2012, it expects to roll out in-store payment service with up to 20 national retailers. With 100 million PayPal customers and 9 million merchant partners, the company can make a strong claim on mobile payments at checkout.

Of course, it's also vying in that space with powerful rivals including Google, which recently introduced its Near Field Communication (NFC)-powered Google Wallet app for making mobile payments. The wireless carrier-led Isis venture, which recently added Visa, MasterCard and American Express, plans to begin testing a competing NFC-based payments service by mid-2012.

eBay itself launched an NFC solution for Android devices that lets users transfer money by tapping two (Nexus S) phones together. But Donahue doesn't expect NFC to become widespread anytime soon for in-store payments, because merchants will be slow to embrace it without mobile standards in place.

"When you're a large merchant and you have 500 stores and 14 checkout lanes per store, you want 0 friction at checkout and point of sale," he said. "And they're not going to allow anything that has friction, no proprietary systems," he said.

Donahue emphasized that eBay's approach will be technology-agnostic. "So we're building solutions that work for their internet-enabled devices, their internet-enabled card readers and can handle card or mobile of all types of technologies," he said. In short, PayPal will get a piece of the action regardless of what technology standard emerges for mobile payments.

Given its customer base and relationships with the major card companies and merchants, it's hard to bet against PayPa playing a role when it comes to point-of-sale payments via mobile.

1 comment about "eBay Everywhere Is Here ".
Check to receive email when comments are posted.
  1. Philip Cohen from Retired, July 22, 2011 at 7:02 p.m.

    Zing goes the Zong …

    Why is eBay paying $240 million to buy Zong? So that we can all have our purchases itemized on our phone bill? (Telcos are now in the banking business or are they all now just (un?)licensed providers of credit?) Have you ever tried to make sense of a modern phone bill? Give me a break; I’ll keep my purchases itemized on my bankcard or banking account statements, thanks.

    “Zong charges merchants more than PayPal for a comparable transaction. PayPal transactions carry a fixed fee of 30 cents in addition to 2 to 3 percent of the purchase. Merchants who use Zong receive between 70 and 92 percent of the purchase amount, said Brooke Hammerling, a Zong spokeswoman.”

    What? Zong (and the telco) takes a commission of between 8 and 30 percent? Would you mind passing that past me again please, surely, I must have mis-heard it the first time …

    eBay: Magento, AliExpress, Skype, Fish, FigCard, GSI Commerce, RedLaser, Where, Milo, Fetch, Zong, Shipwire, PayPal, Visa, MasterCard, Google, Schmoogle, whatever …

    eBay’s chief headless turkey likes buying toys, none of which have done anything, relatively speaking, to materially improve the eBay Marketplace’s bottom line, not even in this the fourth year of this turkey’s three-year turnaround plan to change eBay from what made it so successful into, who knows what? See:

    http://eventhorizon1984.typepad.com/event_horizon_1984_blog/2011/07/amazon-ebay-2011-earnings-call-pre-game-tale-of-the-tape.html#tpe-action-posted-6a00d8354a95b369e2015433be3641970c

    The fact is the rusting old hulk eBay is presently being kept afloat by the clunky PreyPal so it’s good to see these financial services boys recently squabbling and threats to PreyPal now coming thick and fast. It’s interesting times for all we eBay “haters” (oops, I mean “watchers”). I just hope that someone has remembered to bring the popcorn.

    Even though PayPal clearly offers banking-type services (ie, holding depositors’ money in non prudentially regulated banking-style accounts), PayPal is mostly registered in various places not as a “bank” nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal claims that they are not even a “payment network”, and there is a minute degree of truth in that claim because it could, somewhat nonsensically, be claimed that most (but not all) of their activities do no more than facilitate the transmission of money by riding on the back of the banks’ existing payments processing systems.

    In fact, the only thing creative about PayPal has been their founding use of users’ email addresses as an identifier for online payment transactions. PayPal is otherwise no more than a blood-sucking parasite on the back of, and in the main cannot function except via, the banks’ existing payments processing systems.

    PayPal, outside of whatever will ultimately be left of the Donahoe-devastated eBay Marketplace, will undoubtedly eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together.

    Some people may not like “the banks” but all those participating retail banks at least supply a professional payments processing system and even PayPal concurs with that assessment: except for any intra PayPal “deposit account” transactions, they use the banks’ payments processing systems all the time and simply could not exist without them.

    Regardless, all the above comments apply equally to all of the other third-party online “payments processors” that are emerging out of the woodwork and wanting to have access to your banking account. Unless they have formal and direct arrangements with all the participating retail banks, as do the likes of Visa/MasterCard, then the result is invariably going to be as potentially problematic as is PayPal’s clunky operation for its PayPal merchants—a great many of whom can tell you a sorry tale or two.

    All anyone needs to know about the clunky PayPal, at:
    http://forums.auctionbytes.com/vbulletin/showthread.php?p=165263

    What all buyers should know about the criminal activities of eBay, at:
    http://forums.auctionbytes.com/vbulletin/showthread.php?t=23013

    Is that PayPal’s blood in the water, and are those “sharks”—oops, “banks”—I can see circling?

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

Next story loading loading..