eBay and PayPal take out their digital wallet

Feb. 10, 2011 | by James Wester

During eBay Inc.'s Analyst Day on Thursday, the leadership of eBay and its subsidiary PayPal laid out a three- year plan for the company’s businesses. In presentations to analysts and investors at its San Jose, Calif. headquarters, executives forecasted that revenues for the company would increase to more than $13 billion in 2013, a nearly 40 percent growth.

Speaking about eBay and its plans, CEO John Donahoe said, “Clearly, we are starting to play offense.”

A large portion of the presentations focused on eBay’s ambitious vision for mcommerce and mobile payments.

Along with aggressive revenue goals for his organization, PayPal’s president Scott Thompson and leaders of his product team discussed mobile payments and presented a demonstration of what he called a “digital wallet.”

Thompson said PayPal is poised to meet this year’s revenue projections of $4.2 billion and is expected to process more than $165 billion in 2013 with revenues to top $6 billion. That would make PayPal the largest business unit by revenue at eBay. He pointed to PayPal’s plans for mobile payments and cross-border business as drivers for that growth.

On the mobile front, Thompson spoke about the growth in mobile payments and mcommerce worldwide and said PayPal is uniquely positioned to bring a successful mobile payment product to market.

“I believe we are the only service to be perfectly positioned to be the wallet in the cloud,” he said.

Thompson also credited PayPal’s recent initiative to open its payment platform as a key to the unit’s growth, both in general and as a mobile payment provider. Calling PayPal the “universal adaptor for payments," Thompson said PayPal’s platform is “the engine that drives commerce." He said the more than 100,000 third party developers now creating applications for the eBay and PayPal platforms are ongoing sources of innovation.

PayPal’s openness was a consistent theme during the presentations. Thompson said the company’s philosophy of openness would apply to mobile payments where the company would be agnostic toward both platforms and devices.

Ed Eger, PayPal vice president and general manager of North America, said the digital wallet means PayPal would be a payment option at the point of sale by the end of 2011.

To show off PayPal’s digital wallet, Scott Shrauger, vice president of Global Products and Experience, provided a demonstration of how the concept integrated both eBay and PayPal products and allowed customers to search, shop and purchase products from brick-and-mortar stores with only their smartphones.

Using Red Laser, an eBay mobile application that allows consumers to use cameras on their phones to scan barcodes, Shrauger scanned the barcode of a game console using a smartphone. The Red Laser application then located the nearest store selling the console with the smartphones geolocation capabilities. Using the ‘Pay by PayPal’ option on Red Laser, Shrauger then purchased the item from the retailer using his PayPal account and received a receipt and confirmation to pick up the item in the store.

After the demonstration, Shrauger said that no company other than PayPal had the capabilities and reach to make the digital wallet a reality.

 “We can do for mobile payments what we did for online payments, Shrauger said.

He also said if a company wants to succeed in mobile it better be good in payments.

“It isn’t about handsets,” he said.

Topics: Mobile Apps , Mobile/Digital Wallet , Mobile Payments , Online Purchasing , Retail

James Wester / James Wester is a technology writer and blogger with over 15 years of experience in marketing and communications in the technology and payments sectors. Prior to joining MobilePaymentsToday.com as editor he worked as Director of Corporate Communications for Chase Paymentech and ran payment operations for AOL. James has a BA in English from Drury University in Springfield, MO and an MS in IT Management from the University of Virginia.
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