Tag: mpayments

Mobile payment partnership forms between PayPal and Citigroup

| December 19, 2016

The two companies have decided to work together to make it easier for consumers to use smartphones in-store.

PayPal Holdings Inc. has entered into a new mobile payment partnership with Citigroup Inc. The goal is to let customers easily use smartphones to pay for products and services at a checkout counter.

The agreement between the two companies will not impact PayPal’s main e-commerce business.

The PayPal online payments and peer-to-peer transactions will not be connected with the new mobile payment partnership. Instead, it will open up a new direction for the company to be able to participate in smartphone transactions. It offers the ability to carry out transactions with in-store purchases.

Mobile Payments Partnership - Business PartnershipThis new agreement has raised certain questions about PayPal’s growth strategy. Some have questioned whether or not it has the potential to bring this business to a size that would rise above the lost fees.

PayPal’s CEO assures critics that the mobile payment partnership has taken this into account.

PayPal is offering deals to credit card issuers in order to provide incentives for using their new in-store mobile payments, said CEO Daniel Schulman. The company’s head of global core payments, Jim Magats, said “We talked about giving customers flexibility to pay how they want, and now we are rolling out new experiences.”

Citigroup and Fidelity National Information Services (FIS) will begin allowing customers to lead their credit cards into PayPal accounts. This will make it possible for point-of-sale mobile swipe technology. As Citigroup currently boasts 143 million customer accounts, this presents a considerable opportunity.

The idea is to “enable banking in the palm of our customers’ hands,” said Ralph Andretta, Citigroup card exec.

PayPal is also working with two smaller banks as a part of this mobile payment partnership through FIS. They include Wintrust Financial Corp. and Avidia Bank. This agreement is only the latest in a growing race among banks and credit card issuers to take hold of the mobile wallet market that has yet to move into mainstream use in the United States. Other massive participants include J.P. Morgan Chase & Co. as well as tech giants such as Google, Samsung and Apple.

In store mobile payments were few on Black Friday

| December 6, 2016

Cayan data revealed that Americans didn’t turn to their smartphones to complete transactions very much.

Transaction processing firm Cayan showed that in store mobile payments in the United States were low on Black Friday. Fortune Magazine reported on the data and indicated that even though mobile wallet use is rising, it is still tiny. That payment method represents only a very small percentage of the overall total.

In fact, the mobile wallet use in store on Black Friday made up only 0.6 percent of sales.

The Cayan in store mobile payments data suggests a 100 percent year over year usage increase. However, it still shows that the percentage it represents of the total is only just a fragment above being entirely insignificant. The only reason that percentage meant anything at all was because the total sales on all payment methods on Black Friday was such a large figure.

In Store Mobile PaymentsDespite that fact, this makes it very clear that mobile payment adoption remains an exceptionally slow process. It is far from being mainstream as of yet.

Other data has shown that some in store mobile payment methods are more successful than other.

PYMNTS and InfoScout data showed that the use of the Apple Pay mobile wallet is actually declining in popularity. Their data revealed that over the last year, the growth rate for usage has slowed down.

Data from October 2016 showed that only 23 percent of consumers with an appropriate iPhone had actually tried the mobile wallet. That was essentially the same statistic that was recorded back in March 2016.

Moreover, mobile wallet use while in-store has not been doing much better. It has not been keeping up with the rate of growth of m-commerce as a whole. Still, even though there is a low conversion rate, PayPal recorded some strong figures over the holiday weekend that launched the shopping season. About 1 in 3 online purchases using PayPal were made over mobile.

Similarly, Adobe recorded that 45 percent of traffic to retail sites came from smartphones and 25 percent of e-commerce sales were from mobile devices. This suggests that customers are using their smartphones, they simply aren’t using in store mobile payments quite yet.