Banking Review

PayPal head of mobile on the future of money

PayPal has been doing its bit this week to raise awareness of the growing online retail opportunity in Australia. It seems overseas competitors are currently taking around 40 per cent of Australia’s online spend – it’s the kind of statistic that should have Aussie online entrepreneurs rubbing their hands together. Of course PayPal wants to see more online sales since its business is primarily concerned with how people will pay for the stuff we’re increasingly likely to buy online.

PayPal Australia managing director Frerk-Malte Feller says the future for such payments, and indeed the future of money, is mobile, as consumers seek to make payments from any connected device. PayPal flew Laura Chambers, its US-based director of mobile, out to Sydney to talk to leading online retailers yesterday, and we caught up with her to discuss the future of mobile payments.

Chambers says PayPal has been investing in mobile payments since 2005, but it’s only in the last 12 months that it has really started to gain traction. “We did US$25 million in transactions in the first two years, US$141 million last year, and expect to do over US$500 million this year, and to reach 5 million active users.”

PayPal still has a way to go to see mobile payments scratch the surface of what is expected to be US$84 billion in total payment volume this year, but that isn’t stopping it from continuing to invest in mobile. When PayPal launched its peer-to-peer payments app called Bump in March, it saw more than one million downloads in the first few weeks.

Chambers says “By 2013 we expect half of Internet access to come from mobile devices…You can’t be an Internet company today without also being a mobile company”.

PayPal recently did a deal with Bling Nation, a company that uses stickers containing contactless chips, to enable mobile payments. Chambers admits hardware devices, such as those being offered by start-ups Square and Data Payment Services, may not be the long term solution to mobile payments, but she says the Bling Nation partnership is just one of many alternatives PayPal is looking at for point of sale mobile payments. “We’re in wait and see mode at the moment,” she says. “There’s no clear winner for proximity payments.”

Chambers says true progress in the mobile space will only come when the major players stop treating mobile as just another channel for the traditional web. “Before getting it right, people need to realise you can do a lot more with mobile. It’s a lot more personal than the traditional web.”

In the mean time, Chambers says PayPal is interested in partnering with both banks and telcos to explore mobile opportunities. “We’re interested in ways we can work with them more closely.”