October 28, 2010
PayPal trumps banks on mobile micropayments
OPINION
Watching the bevy of announcements coming out of PayPal’s X Innovate conference this week, you could be forgiven for thinking banks have entirely missed the mobile payments boat.
Online media giants including Facebook and FT.com have jumped on board PayPal’s new digital goods payments platform, which will see PayPal receive 5 per cent plus 5 cents of every transaction under $12 that they process. Given the millions of transactions migrating to mobile, that translates to big business for PayPal, and a big loss for banks that have ignored micropayments, despite being aware of them for years.
PayPal wants mobile payments to be mainstream in an environment where most players are still focused on walled gardens, or applications that only work with one bank or telco.
In the October/November edition of Online Banking Review we reveal some of the detail behind BPAY’s MAMBO project – the Australian banking industry’s main hope of open person-to-person payments.
Of course PayPal isn’t waiting around to see if MAMBO gets off the ground, or if it makes its way to mobile devices. The payments giant says it is in talks with Australian banks about how it can collaborate with them to enable person-to-person payments within their mobile banking applications.
The irony is we could soon see the banks signing up for PayPal’s digital goods platform, simply because they failed to recognise the opportunity of online payments. It generally still takes days, mountains of paperwork, and a fair bit of cash for an online retailer to set up a merchant account with a major bank. As long as this remains the case, PayPal will continue to look like a better alternative.
Written by: Charis
Filed Under: Payments, Strategy, The Better Banking Blog
Tags: MAMBO, mobile banking, mobile payments, P2P, PayPal, person-to-person payments, X Innovate
Trackback URL: http://www.bankingreview.com.au/2010/10/paypal-trumps-banks-on-mobile-micropayments.html/trackback
Comments
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- Walter Adamson 10-29-2010 at 7:08 pm
Walter Adamson
October 29, 2010 at 7:07 pm
Agree with your sentiments. We should also bear in mind that it is conceivable that the banks will lose out to an even more unlikely player – Facebook. I wrote about it here http://www.walteradamson.com/2010/10/facebook-credits-5-things-should-know.html “Facebook Credits – 5 things you should know”
While the banks are spending billions to essentially stay where they are on a level playing field silly little Facebook is executing on its global virtual currency objective.
This is bigger than Paypal. It’s true that Paypal signed up Facebook as a customer for their new micropayments platform, but Paypal needed Facebook not the other way around. The importance is that it connects Facebook’s virtual currency with real money. However Facebook already had a large part of that sewn up with with agreement with PaySpan who arguably has a much more sophisticated platform than Paypal. Still no harm to Facebook in having Paypal on board, but it’s neither here not there in terms of their overall ambitions.
It’s odd isn’t it – we say that noone wants to be friends with their bank on Facebook, But Facebook might become the bank. Meanwhile our Aussie banks will still be going back to the future with their “private clouds”.
Walter Adamson @g2m
http://xeesm.com/walter
MIke
November 15, 2010 at 3:43 pm
Man that’s a steep transaction fee – 60c for a $12 transaction for essentially a tiny data tranfer.
Great technology but I’ll stick to eftpos or cash.