PayPal goes after Oz and Amsterdam high streets

PayPal goes after Oz and Amsterdam high streets

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.

The eBay unit has teamed up with four Aussie merchants to roll out a cashless and cardless payments system delivered via integration with existing point-of-sale terminals using the PayPal Here APIs.

Customers who download the PayPal app are checked in when they walk into a participating store. The merchant can then see their name and photo ID at the terminal and charge the purchase to their PayPal account.

PayPal says that retailers - who pay a transaction fee comparable to that for a credit card - can also use the check-in functionality to provide personalised service and loyalty programmes to regular customers.

The participating retailers are Mexican restaurant franchise Guzman y Gomez, fashion retailer Glue, Sonoma Bakery, and education specialist Crayons.

Meanwhile, in Amsterdam over 30 retailers in the De 9 Straatjes shopping district have affixed QR codes to their shop window for another trial.

Shoppers with the PayPal app can scan the codes to be automatically directed to a mobile Web site where they can see the products displayed in the windows.

They then select a product, in their desired colour and size and buy it with PayPal in just one click and have it delivered to their home within two workdays.

Comments: (1)

A Finextra member
A Finextra member 27 November, 2012, 08:44Be the first to give this comment the thumbs up 0 likes

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.