In its latest incursions into the high-street, PayPal has begun testing two different mobile-based payments systems, one in Australia and another in Amsterdam.
An interesting example of how PayPal is disrupting the traditional brick-and-mortar payments ecosystem by offering more than simple payment facilities.
The Australian trial is of particular interest because it provides the merchant with the means of identifying a customer prior to the actual moment of payment, allowing the merchant to offer a more personalised service, with the possibility of influencing
the contents of the basket before the customer reaches the checkout.
It’s not clear to what extent PayPal assists the merchant in differentiating between the most loyal customers and the masses, however even if this type of segmentation is not currently provided it could quite easily be added in the future as the platform
evolves to better meet the needs of the merchant.
The main challenge I can see with this approach is that it relies heavily on the level of motivation exhibited by the customer. If the customer does not manually ‘check in’ using a specific smartphone application then the merchant cannot see their details.
However, similar comments could have been made in the past about FourSquare, and customer motivation didn’t prove to be a sticking point in that case.
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© Finextra Research 2013