By PayPal President Scott Thompson today announced that PayPal now has 100 million active accounts, a pretty impressive statistic. I’m a big PayPal user and love the convenience of the service, but when I mention PayPal to most of my friends, few of them have accounts. Moving into the digital age does this mean more opportunity for PayPal or trouble brewing?
Listen to this quote from the President’s blog post:
We believe that by 2015 digital currency will be accepted everywhere in the U.S. – from your local corner store to Walmart. We will no longer need to carry a wallet.
That’s a big statement. Wal-Mart – sure, but your local corner store? That’s a big push for 3.5 years. That being said, look 3 years backwards from now and it seems more realistic of an improvement, especially considering how big companies like Google are pushing it hard.
PayPal says they’ve built their business for the last 10 years based on digital payments, an obvious fact. But if your phone truly becomes your wallet, I think PayPal could potentially be left out of the loop. The company has become a magnificent middleman for dealing with online transactions, but if your PHONE becomes the middleman, couldn’t your bank or credit card company fill that role just as well, all things considered?
There is clearly going to be a huge shift in technology and PayPal is clearly a forward thinking company that knows tech, so I severely doubt they’ll become the next BlockBuster who simply collect dust, realize they were Rumpelstiltskinning on the bench, and shrivel up and die. But anytime such a huge transition takes place, it presents an opportunity for other companies to swoop in and collect marketshare, attention, and build entirely new businesses. Afterall, isn’t that exactly how PayPal started?
[polldaddy poll=5197712]
With companies big and small getting hacked more and more, I think we’re entering into a battle with hackers that will get worse and worse for us. But I’m still gonna swipe my phone at Walmart.
I’m sticking with cash. it will be a while before I accept NFC. For now, it’s jst a gimmick
You still carry cash?
lol who doesn’t? you?
I want to know that any NFC device I may have will have some kind of encryption that will prevent someone walking past me with a scanner getting all my credit card details. Maybe they already have this, but it’s certainly not something I’ve heard about.
I would like to inform everyone that the credit card companies are pushing NFC technology because it is much more secure than a plastic credit card. It will reduce fraud and increase security for the card holder. A digital wallet on your phone will require you to enter a pin to open the wallet. The credit card company will be able to confirm that this credit card came from your phone. Now not just anyone can find or steal a card or card number and use it. You will need to have your phone and your pin. As for sniffers, you turn on your NFC chip only when you open your wallet. So this relieves the problem of someone using a sniffer to steal your credit card information by scanning your pocket. Your credit card information will be encrypted on your phone. Last, if your phone is stolen or lost, you can wipe your phone clean from any internet connection. Much more secure than plastic!
I’m building a mobile app right now that we are releasing to beta later this summer that connects patrons of restaurants and bars directly to point of sale systems. We are doing the Android app first (iPhone later… yeah I’m an Android fan!).
What does that mean? It means you can open, view, and pay your tab from your phone without having to give a card to the server or even wait for a server. When are you done eating / drinking, just check out on the phone and be on your merry way!
And while I think NFC is cool, I think it’s an evolution, not a revolution, because you still have to deal with lines. I think on-phone payments are where the real future is. I wrote about it in a blog post here: NFC is an Evolution, not a Revolution.
Find out more at TotalTab and get in our beta! (starting in the Boston area!)
I think the passive rfid tags in some credit cards, passports, etc are a very bad idea as a sniffer can potentially read your tags and steal your info at any time.
However, I am totally on board with the NFC phone stuff as it only broadcasts what you want, when you want.
I haven’t carried cash for nearly 10 years.
Despite being an Android fan, I actually really hope Apple implements NFC into their new iPhone because you can’t argue that hordes of non-techy consumers will buy it and give incentive for businesses to start using NFC payment systems. This will also help Google Wallet grow in popularity and can cause more technological progression we desperately need.
PayPal will be a financial institution w/ depositories by then, they won’t just be a giant online POS/CCPS (credit card payment system) provider, you will most likely hold more in your account with them than your banking insitution, thereby making them a bank. BofA, Chase etc will all be competing in this market OR they’ll have to partner w/ PayPal to offer these services in the near future, that’s a fact.
You provide an explanation for CCPS.. but not POS.. Now I know what you are “probably” meaning by POS, but with my experiences with paypal I have an alternate and well used meaning for POS.
won’t happen. you can’t even get a debit card until you’re 10 in the UK, and 100 mil is a long way off 7 bil people
The 21-22c+0.05% cap decision, roughly halving the average fee for debit transactions, may well benefit PayPal: they may now pay lower fees for some of the services that they, as a parasite riding on the back of the banks, obtain from the banks’ existing payments processing systems. And, whereas this decision will adversely affect the banks/Visa/MasterCard, it apparently will not stop PreyPal charging its merchant-users 30c+2.9% on every transaction no matter if the transaction is funded by the buyer via a ~24c direct debit on the buyer’s bank account. It seems, regrettably, there will be no relief for PreyPal merchants from PreyPal.
eBay: Magento, AliExpress, Skype, Fish, FigCard, GSI Commerce, RedLaser, Where, Milo, Fetch, PayPal, Visa, MasterCard, Google, Schmoogle, whatever …
eBay’s chief headless turkey likes buying toys, none of which have done anything to 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?
The fact is the rusting old hulk eBay is presently being kept afloat by the clunky PreyPal so it’s good to see these boys recently squabbling and threats to PreyPal’s online dominance now coming thick and fast. It’s interesting times ahead 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 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 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 its 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 a merchant 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=23540
Is that PayPal’s blood in the water, and are those “sharks”—oops, “banks”—I can see still circling?
Enron / eBay / PayPal / Donahoe: Dead Men Walking.
PayPal ROCKS ! Not only is it my most preferred way to pay, I also impulse buy more if PayPal is offered as a payment option.
Given their track record for arbitrarily freezing large accounts and seizing funds without explanation — and their total lack of accountability with respect to banking laws — I would expect most retailers with any business sense will steer clear of PayPal until they clean up their act.