понеделник, 6 август 2012 г.


Title: PayPal?s Competitive Potential
Description: The ability for customers to use their PayPal account to purchase goods at brick-and-mortar stores is becoming an appealing ? and feasible ? option.
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TRENTON, N.J. ? ?Cash, credit or PayPal?? writes The Star-Ledger, noting that the online payment system, owned by eBay, is setting its sights on options other than the Internet.

?It?s made a big push this year to partner with brick-and-mortar retailers, where about 90% of U.S. commerce takes place. So far, 16 retailers including The Home Depot and Abercrombie & Fitch have announced plans to start accepting PayPal in stores. The move is more than about giving shoppers another choice in the checkout lane. It?s also about the changing world of retail commerce, where one day carrying cash or a credit card may become obsolete,? says the newspaper.

With a lot of attention being paid towards the mobile wallet, which would reduce the checkout process of scanning of a loyalty card, swiping a credit/debit card and waiting for a printed receipt, Paypal could make purchasing even faster: ?customers at stores that PayPal is partnering with can make purchases simply by typing in at the register the phone and pin numbers associated with their PayPal account,? writes the newspaper.

For retailers, establishing a partnership with PayPal has its benefits. For one, retailers could take advantage of PayPal?s ?vast technology to learn much more about their customers? and second, ?PayPal, with its 113 million customer accounts, is muscling into a territory traditionally dominated by card processors such as Visa and MasterCard.?

The newspaper writes that the competition introduced to the market by PayPal could help reduce the interchange fees that retailers pay when customers use their credit cards.

The Home Depot is already seeing savings on swipe fees, the first retail chain to offer PayPal in stores, according to Dwaine Kimmet, The Home Depot?s treasurer and vice president of financial services.

Both The Home Depot and PayPal declined to comment on the savings, but Gil Luria, an analyst with Wedbush Securities, told the newspaper that he estimates the savings ?could be small ? five basis points, or 5 cents off every dollar paid in fees ? but large enough to be meaningful when compounded over many transactions.?

While some say the potential for PayPal to directly cut the costs of swipe fees would also cut into a retailer?s bottom line, the partnership could offer significant savings to retailers who pass on lower transactions costs that are routed from checking accounts rather than a credit card line.

?If they could build on that potential, they could become a very attractive competition to current card companies,? Mallory Duncan, general counsel of the National Retail Federation, told the newspaper.

In April, Cumberland Farms announced a test pilot with PayPal of a new mobile app that offers a 5-cent per-gallon discount. The Cumberland Farms SmartPay program allows customers to pay at the pump with PayPal, saving both time and money. Users must have both a GPS enabled mobile device and a PayPal account to participate. The retailer noted on its website that its SmartPay program is the only mobile app of its type.

Content Subject: Operations
Formatted Article Date: July 31, 2012

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