In an interview with the New York Times “For PayPal, the Future Is Mobile” PayPal’s President Scott Thompson, said he was looking to grow PayPal revenues to more than parent eBay’s revenues, and he expects at least some of that additional revenue to come from mobile.
Currently PayPal accounts for 37% of eBay’s overall revenue in the third quarter compared with 23% just five years ago. eBay’s payments unit, which consists mostly of PayPal, had $838 million in revenue in the three months ended Sept. 30 while eBay took in $1.41 billion in revenue during the same period, however while eBay’s turnover grew just 3% year-on-year PayPal grew by 22%.
In order for mobile to make inroads it’s going to have to work very, very hard. PayPal expects to handle more than $700 million in mobile transactions in 2010, which is just less than one percent of the money processed through PayPal. although growth is looking good, figures from earlier this month from PayPal showed over one million people in the UK have paid via mobile on PayPal, month-on-month mobile transactions grew by 20% in July and August this year, and UK PayPal customers are already making an average of almost five mobile transactions a month.
However if mobile is going to seriously help double PayPal’s current revenues then PayPal must be going to go for some really agressive growth.
One of the areas for growth is expected to come from retailers outside of eBay, PayPal is currently used as an alternative payment method by more than eight million merchants other than eBay, including big names that you wouldn’t expect to take PayPal like British Airways, Dell, LK Bennett.
However even then we don’t see a lot of mobile growth. The only way that we can see that sort of growth happening is in the field of Near Field Communication (NFC). If PayPal were to look to move their brand into offline payment systems, and come up with a rival to ISIS (Isis shows the way for mobile NFC payments) then there’s enough revenue there to build the sort of revenue they want and more, especially as the PayPal brand is so well known worldwide (PayPal has over 230 milion accounts worldwide and it’s growing fast just watch the counter on the homepage if you don’t believe us).
Perhaps that what Thompson meant when he said “This device thing is happening furiously.”
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