PayPal 'flattered' by arrival of O2 Wallet and Pingit
17th May 2012 | 13:28
'We did this in 2008'
Pingit and the O2 Wallet are garnering large amounts of attention, partly courtesy of big money advertising campaigns, and TechRadar asked the company how it felt about the high-profile new launches.
"It's very interesting for a number of reasons," PayPal's Rob Skinner told TechRadar, "First of all it's very flattering that people are starting to shout about something that we've been doing for years.
"Pingit is a great example of that. It basically does what our app has done since 2008.
"We launched as Apple launched the App Store, it was there almost on day one and that's forwarding money to other people.
"That was the original idea of PayPal, believe it or not, back in 1998, to beam money to each other on Palm Pilots.
"It is quite flattering and people are suddenly waking up to the fact that there is this thing called mobile which we were set up to do in the first place."
A big task
Skinner believes that the new arrivals will face a huge task – namely getting enough people on board to hit 'critical mass' and force retailers to adopt the new technology.
"The really interesting bit is: how you do these things? New entries have a challenge in that when you set up something from scratch, be it person-to-person payments or using a phone to make payments in store, you've got to have the critical mass of people.
"The other challenge is that if you are thinking about using a new wallet online or on the high street you've got to explain to retailers why it's worth taking that payment method.
"They aren't going to do it unless there are enough consumers to make it worth their while.
"If you go back to credit cards - the first one - Barclaycard was back in the 60s, but Marks and Spencers didn't start taking credit cards until decades lates."
"That retailer will only take new payment method if they are losing out by not taking it.
"We've been on that slow journey. You can now buy on JohnLewis.com with PayPal, and that's because they could see the benefit."
Skinner believes that PayPal is well beyond the point of critical mass, and that it is now continuing down the route of making its service ubiquitous.
"We have 15 million active users in the UK so we no longer quote total account holders," he added. "It's a bit like how many MySpace users there are! The accounts we quote are active.
"We've never gone in for a big advertising push, and I think the fact that other people are pushing their products this hard is an example of how desperately they need to hit that critical mass.
"From a consumer's perspective they aren't going to be using a new way of payment unless it offers something that's much better than the current way that they use."
"For us it's about putting PayPal in new places and websites – like John Lewis."