PayPal (www.paypal.com) has been one of the processing giants over the years. Up until recently, they have solely dealt with processing online transactions. Now they’re testing the waters in the mobile payment solution field. Earlier in the year, McDonalds introduced PayPal’s new mobile payment solution at one of their conferences in Orlando, Florida. Now, McDonalds is giving PayPal a test run at 30 McDonalds locations in France. This could potentially be a huge deal for PayPal, branching out of their e-commerce field and putting them in direct competition with other mobile payment solution giants like SquareUp and Intuit’s GoPayment. This new technology would let consumers use their PayPal account to make purchases at brick and mortar locations as well as allow the business to accept PayPal on the spot.
Earlier this year, SquareUp partnered with StarBucks, so the race to land these big name retailers is on. The partnership couldn’t have came at a better time. This is a new niche in payment processing that is highly competitive is just starting, and with a name like McDonalds already on their resume, PayPal could be placed in a top position. On top of testing out it’s mobile solutions with McDonalds, it’s already landed deals with 15 other large retailers, who’s names include the Home Depot and the Office Depot.
What we’re seeing is a lot of new ways to make a purchase using your mobile phone at retail locations. There’s NFC which Google has taken advantage of with Google Wallet. There’s also LevelUP which takes advantage QR codes. What does this mean for us consumers? Hopefully it means more choices. Soon the days of not being able to purchase something because you forgot your wallet will be gone. Consumers now should have the option of using a standard debit or credit card, or use an alternative payment method like maybe their PayPal account. Paying with a mobile device is going to become mainstream, and once it’s there, processing giants will either have to adapt or be lost behind.
More options could be a double edged sword, though. Or more specifically, exclusive deals. When these big processing firms try to land these deals with StarBucks or McDonalds, what they could be doing is stifling out the competition. Businesses might partner with PayPay but not LevelUP. If a consumer wants to start using their mobile device as their primary form of payment, they might have to pay with LevelUp at one place, and then with Paypal at another, then maybe Google Wallet. That means signing up and giving personal information to several different businesses which gets to be more of a hassle than it’s worth.