PayPal Inc.’s brand recognition with consumers is helping parent EBay Inc.’s payment unit to position its mobile offerings as the most secure product in the marketplace, eBay’s CEO noted during a conference call to discuss the company’s third quarter earnings.
“What’s interesting is, when we survey consumers on why they use PayPal mobile, it’s like almost a brand advertising we hear back,” John Donahue told analysts during the call Oct. 19.
Consumers view PayPal’s mobile offering as safe and convenient and feel uncomfortable entering their credit card information into a mobile phone, he said.
“They are concerned that somehow it will get stolen or intercepted in the airwaves,” Donahue continued. “People have all sorts of fears.”
Consumers’ comfort level with PayPal’s mobile products is good news for the San Jose-based company, which expects some $3.5 billion in payment volume from those transactions this year.
“Mobile is one way online and offline shopping are blending into a single commerce environment,” Donahue said. “We are focused on enabling commerce–helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes.”
In September, PayPal exhibited some ways consumers could shop using the company’s mobile products (
One scenario shows a buyer interacting with a PayPal application at a merchant’s point-of-sale terminal. Another buyer is seen scanning barcodes at a supermarket, putting those goods in a shopping bag and paying for them instantly on a PayPal mobile phone app and bypassing the cashier’s line.
PayPal also will integrate location-based merchant offers through mobile alerts when a consumer is in a retailer’s general area.
“The act of paying for something should be as seamless as your decision to buy it,” Scott Thompson, PayPal president, wrote on the company’s blog Sept. 14. “The future is about creating real consumer choice, flexibility and control over how people shop and pay.”
During the quarter ended Sept. 30, PayPal reported $1.1 billion in net revenue, up 31.3% from $838 million during the same period in 2010. This was the unit’s first second consecutive quarter of $1 billion in net revenue.
EBay did not report PayPal’s net income, and it did not break out its Bill Me Later unit’s financials.
As of Sept. 30, PayPal’s active account total reached 103 million, up 13.8% from 90.5 million a year earlier. The unit’s net total payments volume grew 30.8%, to $29.3 billion from $22.4 billion.
PayPal’s merchant services net payment volume was $19.3 billion, up 36.9% from $14.1 billion. The unit includes PayPal-accepting merchants, active PayPal accounts and eBay’s share of Mobile Express Checkout, an initiative that enables consumers to pay for purchases using their mobile phones. Mobile Express Checkout offers consumers the same payment option as the online version of PayPal.
As a company, eBay reported third quarter net revenue of $3 billion, up 36.4% from $2.2 billion a year earlier. Net income was $491 million, up 14.4% from $432 million.
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