PayPal finally brought over iZettle's technology to the U.S. — an important milestone in its integration of the European fintech, a Square-like merchant technology company that PayPal acquired in 2019.
But that's not what's making headlines.
The San Jose payments company is facing severe backlash on social media — some of which came from its past executives — after updating its Acceptable Use Policy to threaten fines of up to $2,500 for merchants or consumers who use the payment company's services to spread misinformation, effective November 3. The update was pulled this weekend.
"An Acceptable Use Policy (AUP) notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We're sorry for the confusion this has caused," PayPal's press office said in an email.
But the public relations damage was done.
Elon Musk, a co-founder of PayPal who's now the CEO of Tesla, tweeted "Agreed" to Marcus's post. Searches for "delete PayPal" rose 1,400% on Monday, while
That followed a year in which PayPal's stock fell more than 50%, following a sharp runup during the early days of the pandemic. PayPal hired Blake Jorgenson to be its new CFO as part of a
PayPal's scuttled AUP update would have prohibited customers from actions PayPal deemed to be sending, posting or publication of any messages, content, or materials that promote disinformation, according to
Disinformation is a vague concept, but in recent years it has come to be associated with political speech and "fake news." That places PayPal into the thick of a polarizing climate, which many
"PayPal can best do good by enhancing its payment services, delighting its customers and maximizing long-term sustainable profits for its shareholders," said Eric Grover, a principal at Intrepid Ventures. "PayPal the payment system should eschew politics."
The timing of this media backlash makes its high-stakes product launch all the more challenging.
Zettle to the rescue?
Several other merchant-facing companies are also improving their point of sale technology to attract merchants that are concerned about inflation and a potential economic slowdown. Whether selling in person or online, merchants are looking for anything that can enable them to accept more sales than they can from their traditional checkout lanes.
"There's a macro trend of small businesses needing to cater to consumers by operating in a digital and an in-person environment to create a unified experience, one place to manage money," said Edward Hallett, senior director of SMB at PayPal.
PayPal already had many ways for its merchants to handle payments at the point of sale, but its Zettle system (a rebranding of iZettle) was unique in that it was developed for a European audience, which was years ahead of the U.S. in its acceptance of EMV-chip payment cars. As a result, iZettle needed to come to market with a more capable device than the simple magstripe readers that were common in the U.S. — including PayPal's own device, called PayPal Here.
The new hardware, called PayPal Zettle Terminal, has been
The Zettle point-of-sale app is pre-installed, supporting credit cards, contactless payments, PayPal and Venmo QR codes, along with inventory, reporting and sales management. PayPal plans to shortly deploy a feature that allows merchants to access funds from completed sales in a few moments.
The pricing for Terminal starts at $199, with additional features available for purchase.
PayPal argues there are cost and design advantages to Terminal. The $199 cost is near the low end of mobile point-of-sale hardware.
Terminal is also modular, meaning it can be separated from its printer and used to accept payments at different locations in a store. "We've also designed the product to manage checkout and consumers on the shop floor," Hallett said.
Crowded market
Among other firms,
The London fintech
"There's absolutely heightened competition to create useful omnichannel tools for merchants. E-commerce has grown increasingly important for merchants, and blending online and in-store operations can be a headache, especially for small businesses," said Daniel Keyes, an analyst at Javelin Strategy & Research. "Having simple, flexible, and digital in-store solutions not only enables businesses to blend their operations, but also directly improves their in-store capabilities, and in-store sales are still extremely important in their own right."
Many of these updates at payment companies are seen as a stepping stone to supporting
PayPal is not yet supporting tap to pay in the U.S. though it does offer a version of the service on Android handsets in Europe (Apple's iPhones only recently began supporting tap to pay). A U.S. launch of tap to pay is likely, though PayPal did not give a specific time frame.
"We're fascinated by this and PayPal is in a good place to build on, so watch this space to see how we globalize that," Hallett said.
