Digital Transactions Authoritative, insightful and timely information for payments professionals
With all the commotion over mobile payments, the same names keep cropping up in the payments press—Apple, Google, MCX, Samsung, to name a few alphabetically. And I suspect we’d still be talking about Softcard (or Isis, as it was known until last summer) if it hadn’t collapsed into the waiting arms of Google a few months ago.
Who’s missing from that list? If you guessed PayPal, you’re right. This company, which got its start processing so many transactions for eBay sellers that eBay ended up buying the company for a cool $1.5 billion, is now the country’s biggest processor of mobile payments. Some 30% of its volume in the second quarter was mobile, or about 325 million transactions, according to Dan Schulman, the former AmExer who now runs PayPal.
And now, as senior editor Jim Daly tells the tale in this month’s cover story, “PayPal Unchained,” PayPal is an independent, publicly held company—free of eBay—worth fully $46.5 billion as of trading in mid-August. That makes the company the fourth-largest payments company by market capitalization, not only bigger than Discover, but almost twice as big.
Surprised? Don’t be. Investors don’t always get this sort of thing right, but in this case they’re seeing a lot of things that add up to the kind of value they’ve assigned to PayPal. One of those things is PayPal’s mobile-payments activity. You can talk all day about the potential for Android Pay or MCX, or even Apple Pay. The fact remains PayPal is, right now, processing mobile transactions at a rate of 1.3 billion per year.
To the extent that mobility is the future of digital transactions—and we think it is, along with a lot of other folks—that kind of activity puts PayPal’s market value in perspective. And that volume is set to grow even faster. Currently, users deploy the PayPal app two to three times per month. Schulman wants to put that rate on steroids, raising it to two to three times per week.
How? One potent solution is One Touch, a technology that lets you check out with PayPal with a single click on merchants’ mobile sites. One Touch, which comes courtesy of PayPal’s Braintree brain trust, will be available for half of PayPal’s transactions by year’s end, according to Schulman, up from about 5% today.
Don’t get me wrong. I’m not flacking for PayPal or recommending the stock—that’s not what we do here. And there may well come a day when Apple Pay or Android Pay or Something Pay trounces PayPal. But right now, when you count the payments, mobile is PayPal’s game to win or lose.
—John Stewart, Editor | john@digitaltransactions.net
