DVD Sellers, Others Find PayPal Mobile Spurs Impulse Sales

Since its launch last April, PayPal Inc.'s m-commerce service, PayPal Mobile, has built an attractive portfolio of original equipment manufacturers (OEM) and brands that want to sell direct to consumers. The list includes Fox Home Entertainment (DVDs), Sony BMG (CDs), NBC/Bravo (television-show merchandise), and the National Basketball Association (team- and league-related merchandise). Most of the items sold cost $10 to $100, which fits the PayPal business model of targeting small- to mid-sized tickets. “One of the benefits of providing a direct-to-consumer outlet for OEMs and brands is they can reach an audience they can't at the retail level, and gathering consumer data,” says Kevin Dulsky, general manager of PayPal Mobile, who declines to reveal the number of PayPay Mobile account holders. San Jose, Calif.-based PayPal declines to reveal its m-commerce volume, but it's turning out that the big payoff for OEMs and brands is the opportunity to capture a larger share of impulse sales after a consumer has viewed one of their ads. The service relies on short-message-service (SMS) transmissions to process payments, which seems to suit both the sellers and the consumers they're hoping to reach. To prompt impulse buys, OEMs and brands include PayPal Mobile short codes and product identifiers in their ads. Texting the code and identifier triggers a transaction that debits the buyer's PayPal account. For example, a record label promoting a hit CD might create a phone number of *86 and the artist's name. “In many cases, there is a dropoff on the impulse to buy after seeing an ad if the consumer has to travel to a store or has no immediate online access,” explains Dulsky. “The ease of action provided by PayPal Mobile encourages impulse purchases.” OEMs and brands aren't the only ones generating volume for PayPal Mobile. Charitable organizations such as Amnesty International and Oxfam, a U.K.-based relief agency helping the impoverished, use the service to solicit donations, as well as local organizations seeking to raise money for AIDs walks and recovery efforts after natural disasters. The third leg of the 9-month-old service remains person-to-person payments. PayPal accountholders can use PayPal Mobile to send monetary gifts or repay a loan from a buddy. Funds are transferred to the recipient's PayPal account, which can be used to make purchases from PayPal merchants, P2P payments, or loaded onto to a debit card. “Just as PayPal helped to facilitate e-commerce, PayPal Mobile will do the same for m-commerce,” says Dulsky. “PayPal Mobile is a way to put m-commerce in front the consumer whether they are at work, play, or shopping.”