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Follow on Google News | Could PayPal become the Global Reserve for Cash and Data?As PayPal continues to reinvent itself, expect the mother of all disruptions, a global currency comprised of cash and data.
By: ResearchPAYS Last July at a PayPal sponsored ‘Battle Hackathon’ (http://battlehack.org/) A former marine biologist who compares the behavior of schools of fish to PayPal members, Lunn shared some eye-popping statistics from PayPal’s extensive databank. 65% of items purchased in a retail store have been researched prior on the Internet. 43% of browsers at a retail store actually make a purchase. 37% of shoppers who price compare in the aisles using a smartphone App, complete their purchase online later, On average 15 year-olds will remain on a retailer’s web page for less than 6 seconds. “You have to be where your customers frequent”, claimed Lunn who strongly believes that the future of the web is with mobile devices, especially since market predictions for mobile payments are upwards of $20b. Already a prominent player, PayPal expects to process $7 billion in mobile payments next year, which is 10 times more than its volume two years ago. The increased payment activity has PayPal eyeing the extraordinary, customer-specific, behavioral/ “Without data, you actually know nothing about the consumer,” Lunn exclaimed. Conversely, with data, a merchant can react or address a customer’s wants and needs at a lower cost. Showing a customer what they will most likely purchase based on their personal profile and peer comparisons can make every aspect of running a business immensely easier and efficient. From marketing, sales, inventory control, retail space, and employees on the floor -- every improvement that is based off better business intelligence from rigorous data analytics and self-teaching algorithms will have a lasting impact on the rest of the business as well as for its corresponding supply chain. A customer’s buying experience is important too... “Buyers no longer want to wait in line,” Lunn notes. ...and why should they if technology can enable them to simultaneously step up to the same checkout counter. Lunn used Jambo Juice as an example of how PayPal card holders can order up their favorite drinks from their mobile device and use face recognition to verify their purchase in the store. There’s no waiting around since drinks are prepped in time to be picked up. Watching a worker cut up vegetables and blend a customer’s health drink was once perceived as fresh and worth the wait. Not anymore. Consumers value their time as much as they do the products they buy. With buyers who are far more knowledgable of products than ever before, the only line of defense available to merchants is a deeper understanding of each customer’s buying habits. But knowing what a customer purchases in one store is not enough to make a difference. Merchants need access to richer and timely intel about their customers and their peers, not just what they bought recently from them, but elsewhere too, with other merchants, on or offline, locally and globally. With access to this much data, merchants could target their best customers and provide them with exceptional service especially during the few minutes a customer spends at the check-out counter. For example, once a face is recognized at the register or an account number entered, hundreds of points of data could be co-mingled, correlated, then calculated instantly between PayPal and the merchants database to extract a customized product recommendation such as a special offer or custom-printed coupon booklet. Each timely recommendation would help build a stronger bond with the store’s brand. Integrating into a merchants database or CRM system requires an army of developers. PayPal knows this fact and hopes that its easy-to-use APIs will encourage developers to include PayPal with their client’s transaction processing needs. PayPal’s inclusion would do away with the ‘clunky terminals and expensive equipment’ many merchants use today to process credit card payments. However, to make PayPal’s ambitious business intel plan really work, every merchant on the planet would have to become a PayPal member. Could PayPal become the Global Reserve for cash and data? To appreciate PayPal’s shrewd and brilliant strategy, pick up a copy of a fascinating book titled, “The PayPal Wars” (http://www.amazon.com/ PayPal’s past success was predicated on the individual support of its very members. When eBay tried to replace them with an in-house solution called BillPoints, PayPal’s members rebelled. ...and after many other similar competitive encounters, members could indirectly claim a personal stake in PayPal’s ongoing success. Their formidable presence overwhelmed even their craftiest challengers. Time will tell if PayPal’s loyal customers will once again help them forge on with their ambitious quest to become the Global Reserve for cash and data. © 2013 Tom Kadala End
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