Can PayPal Win the Payment Solution War?
Most of the recent news has been good for PayPal. Consider that Discover Financial Services announced yesterday that it has signed deals with 50 retailers, including Brookstone, Burger King, Nordstrom and Sephora, to offer PayPal’s in-store payment service in stores.
On the not so good news side of the ledger is that Walmart is still not accepting PayPal in its stores.
"We do not see the value proposition for brick and mortar merchants to accept PayPal in-store as it is an aggregation of tender types already accepted in-store at a higher cost and complexity to the merchant," Randy Hargrove, a spokesperson for Walmart, wrote in an e-mail to Reuters.
Walmart is working with other large retailers, including 7-Eleven, Bed Bath & Beyond, Best Buy, CVS, Darden Restaurants, Dick’s Sporting Goods, Gap, HMSHost, Hy-Vee, Lowe’s, Meijer, Publix, QuikTrip, Sears Holdings, Sheetz, Sunoco, Target and Wawa, on a mobile payment technology called Merchant Customer Exchange (MCX).
MCX will offer a variety of benefits, once it goes live, that current mobile payment systems do not, say the companies behind it. These include not only lower costs for merchants, but safeguards on transaction data between the retailer and consumers. And having this data will allow retailers to serve personalized offers directly to consumers’ mobile devices.
While Walmart is a holdout, there is a wildcard that could swing things PayPal’s way.
"Merchant acceptance (of PayPal) has largely been addressed," James Friedman, an analyst with Susquehanna Financial Group, told The Wall Street Journal. "Now consumer acceptance is the harder challenge. At the end of the day, if you solve consumer acceptance, merchant acceptance will follow."
- PayPal hits offline milestone, but Wal-Mart holds out – Reuters
Discover Pushes PayPal’s In-Store Service as First Data Holds Out – The Wall Street Journal (sub. required)
- Leading Retailers Form Merchant Customer Exchange to Deliver Mobile Wallet – Merchant Customer Exchange
- MCX: The Future of Mobile Payments – RetailWire
What is your assessment of PayPal’s in-store payment opportunity? Do you expect MCX or another system will eventually dominate the mobile payment arena?