Frictionless payments driving growth at Facebook and PayPal
28 January 2016 | 11967 views | 0
The creation of a frictionless payment experience is driving innovation - and profits - at PaPpal and Facebook, as both companies report a stellar set of results.
PayPal's fourth quarter sales beat estimates as the vendor drew in more merchants and enticed consumers with its One Touch buy button for shopping on smartphones.
PayPal posted revenues of $2.7 billion in the fourth quarter, adding 6.6 million new accounts.
CEO Dan Schulman revealed that the firm processed $20 billion in mobile payment volume, up 45% from the same quarter in 2014, attributing much of the growth to the vendor's implementation of a single log-in and buy button for making payments at merchants.
So far ten million people have signed up to use One Touch, with the logo appearing on one million merchant sites worldwide. PayPal is now extending the in-app instantaneous payments experience to users of its popular Venmo mobile app, which is currently being rolled out to selected users on a trial basis.
Facebook's Mark Zuckerberg has also been talking up the importance of simplicity in payments as the company boasted 52% year-on-year growth in revenues to $5.84b in Q4.
In an earnings call to analysts, the Facebook chief said: "On payments, the basic strategy that we have is to make it — especially in products like Messenger where the business interaction may be a bit more transactional — to take all the friction out of making the transactions that you need."
For Zuckerberg, the strategy is seen as key to boosting ad sales with business users. In his talks with analysts he name-dropped Apple Pay as a potential future partner of in-app transactions.
"We'll partner with everyone who does payments," he told analysts. "We look at the stuff that Apple is doing with Apple Pay, for example, as a really neat innovation in the space that takes a lot of friction out of transactions as well."