While visiting the lake for Memorial Day, I misplaced my wallet. Luckily, I rarely carry cash, but I of course had to cancel my credit and debit cards. So when I urgently needed to buy a set of light bulbs last week at my local Home Depot, I realized I had only one option to pay for it: PayPal’s in-store payments.
In this post, I describe my experience using PayPal’s payment offering for brick-and-mortar retailers–one that left me with a deeper understanding of what new payment options really need for widespread consumer adoption.
My In-Store Payments Experience
Today, there are two ways to use the PayPal service at Home Depot: enter a phone number and PIN, or swipe a PayPal payment card. Once arriving at the store, I hopped onto PayPal’s website on my phone and enabled in-store payments for my account.
Ready to go, I grabbed a box of light bulbs and first headed over to the self-checkout terminal. I scanned my item, chose “PayPal” as my payment option and entered my phone number and PIN.
“Declined. Please choose another form of payment.”
After I hunted around on my phone for a minute, I realized I mistakenly forgot to accept the Terms and Conditions for in-store payments. After agreeing to the terms, I returned to the self-checkout, scanned my item and went through the process again. This time, it went through. I received a text from PayPal moments later:
Success. Without any form of payment other than my bank account-linked PayPal account, I was able to make a retail purchase.
Do Shoppers Need Another Payment Option?
Thankfully, a wonderful woman found my wallet and contacted me to meet-up and return my belongings. With my wallet (and new credit cards) back in my pocket, I asked myself–would I use PayPal at Home Depot again?
No, not in its current form. In terms of convenience, the act of entering my phone number wasn’t any quicker than swiping a card and either using a PIN or electronically signing.
The solution I used doesn’t solve a problem experienced by many shoppers. Outside of my exact situation, I don’t see the allure of using this version of PayPal’s in-store payments over traditional payment options.
After watching video footage from PayPal’s May 24 in-store payments announcement, it appears PayPal is attempting to be all-things-for-all people with its in-store payments venture. With its PayPal Here offering, the company is working to directly compete with Square and Intuit GoPayment for the pop-up, mobile retailer market. Meanwhile, the in-store payment solution I witnessed at Home Depot will be deployed in new retail chains this year, including Foot Locker, Guitar Center and JC Penney.
While these two announcements didn't particularly excite me, a third announcement of partnerships with a group of retail software vendors caught my attention. These partners display the first version of mobile payments that I’m convinced can benefit both consumers and retailers, and drive the adoption of M-payments.
Value-Added Features Crucial to M-Payments Adoption
PayPal’s announcement introduced four mid-market POS software companies that will offer system-wide PayPal mobile payment integration: Leapset, ShopKeep, Vend and Erply. Customers simply “check-in” with the PayPal app in the store to pay at checkout (unlike Google Wallet or ISIS, which requires customers to wave their phones at the point of purchase).
I feel these new software partnerships can successfully encourage consumer adoption by creating a unique customer experience that focuses on convenience and checkout simplification. Check out this video from Vend, one of the POS vendors in the new PayPal partnership:
This is an exciting application of mobile payment technology because it can (potentially) change the shopping experience for customers in three ways:
- Checkout simplification. The customer doesn’t have to do anything at checkout except check-in if they’re a new customer; if they’re a return customer, the app can check them in automatically. This is is a better approach than Google Wallet, where customers must wave their phones in front of a payment terminal, or how PayPal is implemented at Home Depot, which requires entering a phone number and PIN.
- Improved customer service. By checking-in, employees are alerted by the POS software when new customers and regulars are in the store. Armed with this information and shoppers’ purchase histories, customers can receive more informed, attentive service from employees.
- Loyalty program integration. If a store integrates its loyalty and rewards programs with the payments app, the increased visibility would likely entice shoppers to visit (and spend) more frequently. And earning more rewards by using mobile payments would encourage continual use.
If retailers want consumers to adopt mobile payments, they’ll need to focus on an offering that creates a unique customer-retailer relationship and makes shopping easier. PayPal’s offering seems to enable this in an exciting way, and it will be interesting to see if PayPal is the solution that can launch mobile payments from idea to reality.
While both Google Wallet and ISIS are waiting for near-field communication (NFC) technology to be included in smartphones and checkout terminals, PayPal’s mobile payments solution has all the pieces in place. Retailers that are evaluating new point of sale solutions and are interested in offering a mobile payment option today should closely evaluate these POS vendors partnering with PayPal.
Please share your thoughts or experiences with PayPal or other mobile payment services in the comments below.