PayPal says that its plan for super-charging m-commerce is more than just enabling an extension of its online payment infrastructure to mobile. "We're not just shoving a credit card on a phone," says President Scott Thompson in a blog post announcing the strategy yesterday. Oh, no, nothing so narrow, he seems to be saying. "PayPal is reimagining money."
Actually it looks more like PayPal is trying to pull together pieces that are already pretty familiar to mobile at retail into something that merchants can use to capture customers across the purchase cycle. Which also means that it pits PayPal against a number of incumbent players, some of whom have established relationships with the mobile value chain. For instance, in the teaser video PayPal appears to use a geo-fencing technique to allow permitted vendors to target offers and advertising when the consumer gets near. In-store the system allows for barcode scanning and inventory availability, point of sale purchases and loyalty card management. All of this seems to occur within the confines of a dedicated PayPal app.
This feels like déjà vu all over again -- PayPal coming up against the credit card companies as an alternative payment solution that works across retailers. On mobile, of course, the company will have to contend with the ISIS consortium of credit card companies and carriers that are already working on an NFC-based payment and customer management solution. Of course there is Google Wallet as well. On other fronts, there are existing geo-fencing and scan code companies already at work in this market, so how PayPal insinuates itself into the process is anyone's guess.
PayPal does recognize what the ISIS and Google Wallet partners already acknowledge: Mobile payments in and of themselves are not the real value-add in turning a phone into a wallet. Credit cards are a pretty frictionless solution not in search of a replacement. This has much more to do with leveraging the on-board computer and storage in a cell phone to deliver more to the consumer like special offers, loyalty card management and even tie-ins to other apps (budgeting, dieting, etc.).
But PayPal's imagination stretches far (see the video below). The company foresees a number of unlikely scenarios in this "reimagining" of money. Parents tap their kids' phones to transfer an allowance (please!). People whip out their phone to use at the same checkout payment device that they could just as easily use their credit card with (again, is there a problem here that needs fixing?). And my absolute favorite is the promise of avoiding long checkout lines by using a scan code to make the payment for items in the aisle. The woman in the video takes a product, scans and buys it, then puts it in her handbag, waving her phone to the checkout girl as she leaves the store -- because that is all the cashier needs to know so she doesn't call security about the women who just walked out with a package of birthday candles in her handbag.
Well, while you are reimagining money you might as well reimagine reality too.