OTTAWA – In a presentation to the 2010 Mobile Money Forum in Ottawa last week, PayPal Canada said that mobile will be the next, and preferred, payment platform for a large portion of consumers.
When the Web emerged as the “killer app” for the Internet, it brought a whole host of services such as data transfer protocols, hosting capabilities, payment gateways, remote ecommerce, robust search, web services, cloud computing and the emergence of social networking. Mobile takes advantage of all of these, explained Darrell MacMullen, GM at PayPal Canada.
“Mobile is not necessarily a new channel or the new web in the sense of we’re moving from Internet browsers connected to desktops and landlines to a mobile browser and different connectivity,” he said. “It takes advantage of all of those pieces and brings things to a whole different experience.”
Smartphones and their “desktop like” experience are going to play a major role in the adoption of mobile payments. Given smartphone penetration growth, particularly the iPhone, more and more Canadians will be willing to purchase good and services with their mobile device, said MacMullen.
He explained that it took 17 quarters for the Web to reach 50 million users. After the introduction of the iPhone, it took half that time to top that figure.
“If we were actually to layer iPads on top of this, the trajectory is even faster,” he said.
According to some estimates, 10% of all ecommerce will take place on mobile phones, but MacMullen said this figure may be misleading. “I think that is a very sandbagged number as well, based purely on what we see with PayPal and the amount of traffic,” he added.
Surveys done by PayPal Canada reveal that in 2009, 28% of Canadians were conducting electronic payments, but this is up to more than 50% this year. In addition, 13% are already using their phones to spend money and 32% of people under the age of 45 would use their phone to pay at a store if possible.
Despite the nascent stage of mobile payments in Canada, PayPal said it’s already reaping significant financial benefits with revenue climbing from $25 million in 2008 to a projected $700 million in 2010.
Security is cited as one of the major concerns when it comes to mobile payments adoption, but MacMullen said this isn’t an issue with PayPal. Because users don’t have to share credit card data or other payment credentials, they don’t have to worry about the integrity of their personal information.
“If someone has a PayPal account they’re able to access the same account online as they can through the phone,” he explained. “You are never storing your credit card or bank account information on your phone, nor are you ever sharing it with anyone you are transacting it with. You are simple accessing your PayPal account from the mobile phone.”
PayPal is also working to make it easier for people to make purchases through their mobile phones. MacMullen acknowledges that the conventional way of making a payment through PayPal isn’t necessarily well suited to the mobile phone, so the company is developing a one-click method.
“We actually have an embedded payment experience where a small window pops up in a game or an application that allows you to complete a purchase within one click,” he explained.
PayPal isn’t trying to re-invent the wallet or create a new mobile wallet, the company wants to make it easier for consumers to purchase goods and services regardless of the platform.
“When you look at PayPal’s virtual wallet, it lives in the cloud. If you want to access it from a web terminal, that’s fine. If you want to access it from a phone, fine. If you want to access it from your TV, fine. If you want to access from your car, fine. It doesn’t really matter where your access points are,” explained MacMullen.
