Consumer Insights · Media Strategy · Brand Planning | Los Angeles, CA

PayPal Wants to Be Your Cash Register

Blame my stint selling point of sale terminals for the soon-to-be Icahn Computer Corp., but I’ve had a dorky interest in how people pay for things for a while now. I don’t mean how consumers can afford things or anything like that, but the systems they use to check out at retail outlets, and how they’re evolving. Thrilling, I know.

But payment systems are part of a bigger ecosystem that includes things like credit, mobile wallets/NFC technology, daily deals and other coupons, and how consumers discover and choose businesses in their local area. Even if they’re not things the average person spends all that much time thinking about, they are having/will have dramatic effects on the way we shop. With many payment technologies still developing and trying to gain acceptance, the payment processing industry is something of an arms race these days.

Established players like Mastercard are duking it out with upstarts like Square and big fish trying to jump into a new pond (e.g. Google) to try and take your money, and the merchant fees that go with it. Beyond that, they want a base of consumers and merchants who use their services, so they can offer them other services. It’s a high stakes game, and with technologies still evolving, it’s likely we don’t even know how high, yet. Do I have your interest now? Maaaan.

Well PayPal, once simply Ebay’s payment processor, is jumping into the point of sale space with both feet. Thev’ve just announced that merchants who adopt their platform on POS terminals (bad acronym, I know), tablets or smartphones, won’t be charged merchant fees for the rest of 2013. Those fees, which often hover around 3% of gross receipts, are a big deal to merchants (hence those irritating minimums some merchants enforce to use credit/debit). So this is a huge land-grab in this space for PayPal. They want market share, short-term profits be damned. With the biggest pieces of the merchant processing pie yet to be baked, it’s not hard to see why.

Imagine a world where PayPal is more ubiquitously accepted than Mastercard. Such a shift will affect not only how we ring up goods and services, but also how we search for them, how we receive discounts and ultimately, where we shop. In short, even if it’s not a super-thrilling topic, it’s one that will have a huge impact on the future of shopping, dining and just about every way we interact with local retail.

Leave A Comment

You must be logged in to post a comment.