eBay’s PayPal Going In-Store at Home Depot, Other Retailers

PayPal, eBay Inc.’s e-commerce payment provider, is taking on Visa and MasterCard in the off-line world of in-store purchases, and it will start with 2,000 Home Depot stores.

By March, customers with PayPal accounts will be able to purchase items at Home Depot checkout stations or self-checkout kiosks by swiping a PayPal card and entering their PIN number, or with a phone number and pass code.

PayPal will hold trials with 20 more retailers by the end of this year in a strategy eBay sees as profitable within a five-year timetable.

PayPal is also partnering with AJB Software, which provides point-of-sale software to large brick-and-mortar retailers.

eBay began a trial with shoppers this week in 51 of Home Depot’s stores, primarily in the San Francisco area.

For Home Depot and other retailers, the PayPal purchases carry lower fees than debit or credit card purchases.

PayPal users have the luxury of different payment options when they sign up online and it would translate over to in-store convenience. They can link checking accounts, credit cards or other payment methods to their PayPal accounts. The new service has the potential to siphon away business from the MasterCard and Visa networks and credit card issuers.

eBay this week reported quarterly results that exceeded analysts’ forecasts, helped by the sale of its remaining investment in Skype and 28-percent jump in revenue growth at its PayPal unit.

PayPal now claims 106.3 million active registered accounts, a 13 percent increase year over year.

On average, PayPal added a million new accounts every month in 2011.

In the fourth quarter, revenue from PayPal’s international markets exceeded revenue from the U.S. for the first time, “reflecting the company’s strong global footprint and growth in emerging markets,” eBay said in its earnings statement.

PayPal’s net total payment volume grew 24 percent to $33.4 billion in the fourth quarter of 2011. Its mobile payment volume reached $4 billion in 2011, more than five times the mobile payment volume in the prior year, as more consumers used their smart phones and tablets to pay online.

J. Lipsky

Hello, I am John, born in Cedar Rapids, but lived a lot of years in Latin America. I am an economist and have specialized in credit and debt. Originally sovereign debt, but later on, in credit score management and debt consolidation. I write for many publications. Here in eCreditDaily, I write about credit, second chance banking, and debt. I also write for other websites and bulletins about inflation and country risk.

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