smartphone payments Archive

Mobile payment partnership forms between PayPal and Citigroup

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.

PayPal mobile commerce represented 1 in 3 Thanksgiving and Black Friday sales

Of all the online orders processed by the payment platform, one third were transacted over mobile.

According to new PayPal mobile commerce data, one third of online purchases on Thanksgiving and Black Friday using that payment method were from smartphones or tablets.

Mobile devices made up one third of the total payment volume over PayPal on those two days.

These PayPal mobile commerce statistics also help to illustrate the importance of that payment platform to e-commerce as a whole. It is clear that consumers are using this transaction method on an increasing basis to complete their online purchases. When it comes to some of the top shopping days of the year such as Thanksgiving and Black Friday, that can make a significant impact on retailers’ bottom lines.

PayPal mobile commerceThe recent data suggesting that one third of PayPal payments for online purchases on those two days only underscores reports from other sources. Data analyses from other firms also suggest a similar trend where mobile accounted for about a third of Black Friday online spending.

The PayPal mobile commerce figures align very closely with the data from Adobe regarding Black Friday.

Adobe’s data pointed out that online sales during that one shopping day broke the $3 billion mark. It also pointed out that mobile devices accounted for just over a billion of those transactions.

The new figures from PayPal only add more weight to the confirmation of that trend. This also helps to provide insight into a larger part of the market, as its data adds to that from other payment methods.

PayPal currently has more than 192 million active customers as well as 15 million active merchants.

The shopping trend for both Thanksgiving Day as well as Black Friday revealed that about one third of its online purchases were through PayPal mobile commerce. This helps to show that it was not just a single day blip but that it may be a consistent trend in online shopping. This was particularly true as the total payment volume was not the same on both days. Still, the percentage of mobile shopping remained steady despite the difference in total spending.