From Internet Retailer by Kevin Woodward: 'Online payment company PayPal has taken its first steps outside of e-commerce with the announcement late Friday that The Home Depot Inc. is testing PayPal acceptance at five of its stores. Neither PayPal, a unit of eBay Inc., nor Home Depot, would disclose where the stores are or how many PayPal employees are involved in the test.' Continued.
Trish's Comment: Finally we have some tangible proof of PayPal's progress in the off-line payments industry. It is only a very small-scale trial and it only includes PayPal employees but it is a giant step towards implementation as it already involves POS software upgrades, even if only with a small new set of capabilities. As Gil Luria, analyst at Wedbush wrote in a note to nvestors on Friday 'We believe a full Home Depot roll out would increase PayPal's addressable market by more than 35 percent overnight [...] Although penetration would start at zero, we believe that by adding value to consumers and merchants, PayPal may eventually approach penetration rates comparable to its online presence'.
In any case, it is clear that, at the moment, shoppers would have little incentive to use PayPal at Home Depot. Paying with cash or credit cards is easy enough and PayPal is not yet adding any real value. The partnership would only be powerful if PayPal follows through on its plan to introduce technology that allows 1) retailers to target customers with offers via their smartphones and 2) customers to spend less time searching for items and queuing at checkout.
I look forward to reading (and maybe even experiencing!) PayPal's next steps. Not only do they have the opportunity to revolutionize the customer experience, they are also the first company that is offering a clear option to by-pass credit cards when paying at the counter - you just need to link your PayPal account to your bank account!
Trish's Comment: Finally we have some tangible proof of PayPal's progress in the off-line payments industry. It is only a very small-scale trial and it only includes PayPal employees but it is a giant step towards implementation as it already involves POS software upgrades, even if only with a small new set of capabilities. As Gil Luria, analyst at Wedbush wrote in a note to nvestors on Friday 'We believe a full Home Depot roll out would increase PayPal's addressable market by more than 35 percent overnight [...] Although penetration would start at zero, we believe that by adding value to consumers and merchants, PayPal may eventually approach penetration rates comparable to its online presence'.
In any case, it is clear that, at the moment, shoppers would have little incentive to use PayPal at Home Depot. Paying with cash or credit cards is easy enough and PayPal is not yet adding any real value. The partnership would only be powerful if PayPal follows through on its plan to introduce technology that allows 1) retailers to target customers with offers via their smartphones and 2) customers to spend less time searching for items and queuing at checkout.
I look forward to reading (and maybe even experiencing!) PayPal's next steps. Not only do they have the opportunity to revolutionize the customer experience, they are also the first company that is offering a clear option to by-pass credit cards when paying at the counter - you just need to link your PayPal account to your bank account!
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