But PayPal Here is just one part of what the company is planning in what is shaping up to be an ambitious strategy. Over the past two months, PayPal has rolled out its payment technology to nearly 2,000 Home Depot stores as an alternative to credit cards. It's partnered with Ingenico and AJB Software Designs to create an in-store payment system that can be quickly rolled out to other large chains.
It's too early to tell if PayPal Here will become more than a payment method for people who left their wallets at home. The company's $7 billion estimate for 2012 mobile payments doesn't include such point-of-sale transactions. PayPal charges merchants a 2.7% transaction fee, which is roughly equal to Square's 2.75% and may offer merchants an incentive to push for PayPal if it's cheaper than credit card transactions.
But as important as smartphones may become in handling payments, PayPal is aiming well beyond them, offering a method of payment on PCs as well as the ubiquitous point-of-service terminals at brick-and-mortar cash registers. Ebay is also sure to integrate PayPal deeply into its X.Commerce initiative, a commerce platform announced last fall for online as well as offline retailers.
As PayPal's strategy comes slowly into focus, it's clear the company is thinking broadly – positioning its service in as many commercial venues as possible – and designing an interface that appeals to merchants and consumers alike. Anuj Nayar, PayPal's director of communications, says the company will roll out even more changes starting this month that "marks the beginning of fundamental change in what PayPal means to customers."
Until now, for many PayPal customers, the service has simply been one of multiple ways to pay online, most often seen as an alternative to credit cards. After years of planning, the company may finally be worming its way into our wallets, becoming as commonplace as cash once was. The rest of this year should show whether PayPal can deliver on that promise.
