PayPal Acquiring iZettle to Compete With Square for In-Store Payments Processing

PayPal this week announced plans to acquire the Swedish-based payments hardware company iZettle for $2.2 billion, with a plan to expand its presence in brick and mortar stores thanks to iZettle's technology. The acquisition will also help PayPal bolster its business across iZettle's main markets of Europe and Latin America (via Bloomberg).

Notably, the purchasing deal marks PayPal's biggest acquisition ever and will put it in the hardware market as a direct competitor to small business-focused company Square. Both Square and iZettle sell payments processing hardware devices that help small businesses conduct both traditional credit card transactions and NFC payments from mobile wallets like Apple Pay.


The deal is now expected to close in the third quarter of 2018, while PayPal says it hopes to "reap the advantages of the merger almost immediately in certain areas."
“Small businesses increasingly want a full suite of capabilities across channels, a one-stop stop,” Dan Schulman, chief executive officer of PayPal, said in an interview. “IZettle was the perfect fit in many ways.”

“When we think about the combinations and capabilities of PayPal and iZettle,” Schulman added, they “set us apart from anyone else.”
When it does close, PayPal will gain in-store capabilities in 11 total markets that iZettle currently resides in: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden. In the announcement, PayPal also mentioned that the acquisition allows for in-store expansion opportunities in other existing PayPal markets where iZettle isn't yet established, including the United States.

In addition to basic payments processing, Square and iZettle give businesses access to other features like invoicing software and in-stock/out-of-stock analytics. Square launched in the United Kingdom in 2017, and in the United States Square has been a partner with Apple over the past few years, launching its original NFC reader that introduced Apple Pay to small businesses back in 2015.

For PayPal, the payments company is planning its push into offline processing as it faces increased competition online. In February, eBay revealed its plan to phase out its 15-year partnership with PayPal and eventually favor payments competitor Adyen on the eBay marketplace. Then in April, Visa, Mastercard, Discover, and American Express announced an initiative that will combine their online payment options into "a single button," directly competing with PayPal for online shoppers' attention.

Tags: Square, PayPal

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Visa, Mastercard, Amex, and Discover Plan Combo Checkout Button to Compete With PayPal

Visa, Mastercard, American Express, and Discover are planning to combine their online payment options into "a single button," hoping to make customers' shopping easier and reduce friction in the checkout process. The button will be a major competitor to PayPal, and combat what's called "the Nascar effect," where multiple payment logos and options dot the purchasing interface on online marketplaces "like the side of a race car" (via Bloomberg).

The new project is being headed by Visa and Mastercard, which announced during an industry conference that they will integrate the Visa Checkout and Masterpass payment options into the button. Afterwards, spokespeople for American Express and Discover announced they are joining the project as well. With all of these platforms located behind one button, users who already have payment options saved in each will be able to checkout "with a few clicks."


Still, the project is in early stages, with a name and the visual design of the button still undecided. Visa and Mastercard hope to start moving customers enrolled in Visa Checkout and Masterpass to the new program by the end of this year, and expanded checkout support is expected in 2019.

With all of the major credit and debit card companies joining forces, the new button is believed to be a direct competitor to PayPal, which amalgamates a customer's credit cards, debit cards, and bank accounts into one place for easier checkouts.
The aim, according to the card networks, is to make online shopping simple, letting people finish with a few clicks -- an experience pioneered by PayPal Holdings Inc. Yet some analysts say the coordinated effort may ratchet up competition between cards and PayPal, something long seen as a potential risk to that company’s meteoric growth.

“This is always kind of a looming threat to PayPal,” said Thomas McCrohan, an analyst at Mizuho Americas after the first announcements this week.
In a recent survey, 58 percent of merchants said they accepted PayPal in 2017, followed by Apple Pay at 48 percent, Visa Checkout at 26 percent, Masterpass at 16 percent, and AmEx Express Checkout at 9 percent. By providing a less splintered landscape for online shopping, the credit card companies hope to increase visibility among the "one-button concept" marketplace, where people currently "think of PayPal and Amazon Pay," analyst Raymond Pucci said. "People don't really say, 'Oh yeah, Visa and Mastercard.'"

PayPal has been facing increased pressure from rival payments processors recently, with eBay in February detailing plans to phase out its 15-year-long partnership with PayPal to integrate Adyen as its primary payments platform.

PayPal and eBay have an operating agreement to stay partners through mid-2020, so the Adyen alliance will begin slowly by educating buyers and sellers about the new processor in late 2018 and throughout 2019. By 2021, eBay wants to have "transitioned a majority" of its marketplace customers to Adyen, at which time PayPal will be relegated to a secondary checkout option.

Mastercard, Discover, American Express, and Visa also plan to make checkouts simpler in physical stores, this month eliminating the signature requirement for purchases.


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eBay Details Plans to Replace PayPal as Main Payments Processor With New Partner Adyen

eBay this week announced major changes coming for both buyers and sellers on its online marketplace, with a plan to phase out its 15-year-long partnership with PayPal and eventually integrate Amsterdam-based payments company Adyen as its "primary partner for payments processing globally" (via Recode). This will eventually affect all eBay customers on every version of the site, including desktop and its iOS and Android apps.

The process will happen over a long period of time, beginning with payments intermediation on its marketplace -- essentially helping sellers and buyers transition to Adyen -- in the second half of 2018. This will be a "small scale" initial expansion, and grow further throughout 2019. eBay currently has an operating agreement to keep PayPal as its primary payments processor through mid-2020, so the plan is to have "transitioned a majority" of its marketplace customers to Adyen by 2021.


After that time, PayPal will be relegated to a secondary checkout option for customers until July 2023. Following that transition it's unclear whether eBay and PayPal's partnership will end completely, or if the payments company will simply continue as a secondary option in checkout.

For Adyen, eBay noted that there will be "additional payments-related data" required to transition to the new platform, with these steps "required" to continue selling on eBay. Still, the company ensured that most of the ways that buyers and sellers pay for and receive money on the site will "be very similar" to how it worked with PayPal.
The way that sellers engage with eBay in an intermediated landscape will, for the most part, be very similar as they do today. For example, sellers will not need to change their accounts with eBay. Sellers will continue to log into eBay and manage their listings as they do today. As eBay begins to intermediate payments, sellers can expect to see new, streamlined dashboards and reports inclusive of payments – all within eBay.
eBay said customers will benefit from this shift in multiple ways, including lower costs of payments processing for sellers, as well as a simplified pricing structure and "more predictable access" to funds. Buyers will have more payment options, which eBay hopes will increase checkouts on the site. Additionally, because Adyen focuses solely on providing back-end payments services and will not link out to a secondary website, eBay said it will now "manage the entire checkout experience" so the payment process can be more streamlined.

PayPal became eBay's main payments provider in 2003, following eBay's acquisition of PayPal a year prior at $1.5 billion. In 2015, the companies split to become separate public companies, but agreed upon a deal that keeps PayPal as its primary payments provider for five years, through 2020. For PayPal, the company has been expanding its own reach in online payments over the past year, allowing friends to pay one another in Facebook Messenger and introducing Venmo as an online payment option at more than two million retailer websites last October.

Ahead of the launch of Apple Pay Cash -- which works like Venmo in letting users pay one another through an app -- PayPal CEO Dan Schulman said he didn't think Apple's peer-to-peer payments platform would hurt Venmo because of Venmo's availability across ecosystems. "We’re technology agnostic," Shulman said at the time, emphasizing that this provides the PayPal-owned company a "powerful advantage" over rival P2P platforms.

Tags: eBay, PayPal, Adyen

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PayPal Offering $100 iTunes Gift Card for $85 on eBay While Supplies Last

If you're looking to start stocking up on iTunes gift cards for the holidays, PayPal's Digital Gifts storefront on eBay today has the $100 iTunes gift card at $85 for customers in the United States. You'll need to be logged into a PayPal account, and once you complete the purchase the digital gift card will be emailed to you with a code to add the credit to your iTunes account.


Discounts on iTunes gift cards are getting more frequent as holiday shopping nears, with most deals marking $50 and $100 cards off by 15 percent. As Black Friday gets closer, you can expect larger discounts -- of around 20 percent off -- to begin popping up at various retailers. We'll be sure to notify you when these holiday deals begin happening; you can also keep an eye on our Black Friday Roundup and Deals Roundup for even more of the latest Thanksgiving and Christmas sales.

Note: MacRumors is an affiliate partner with eBay

Related Roundup: Apple Deals
Tags: eBay, PayPal

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You Can Now Pay Friends Through Facebook Messenger Using PayPal

Last year, PayPal launched within Facebook Messenger as a way for users to shop and complete payments directly through the messaging app. Today, the two companies are expanding the focus of this feature and opening up peer-to-peer payments for Facebook Messenger users who have linked their PayPal account to the app.

With a rollout starting today, Facebook Messenger users will be able to tap on the blue plus icon within the app, then select the green Payments button, and choose PayPal to send money. This functionality will work in one-on-one conversations, as well as in group texts. PayPal said this will make it easy to split a bill, pay rent, and more.


Although PayPal's press release doesn't specify, the company's image depicting the new feature confirms that a user's PayPal balance and linked banking accounts can be chosen for P2P payments in Facebook Messenger.
We’re excited today to announce an expansion of our relationship with Facebook with the addition of PayPal as a funding source for peer-to-peer (P2P) payments, right in Messenger. People will have the option to send and request money using their PayPal account, and this integration in Messenger is starting to roll out to U.S. consumers today.

As the leader in P2P payments with $24 billion in P2P volume during Q3 2017 alone (up 47% year-over-year), the ability to send and request money in Messenger – one of the most widely used apps in the world – gives people more choice and more convenient ways to get things done in different contexts. Whether it’s splitting a bill for a cab ride or a night out, paying for your share of the rent, or making sure you get paid back for Mom’s birthday present, PayPal makes exchanging money between friends and family simple.
There will also be a new PayPal customer service bot for Messenger, letting PayPal customers receive account support without leaving Facebook's app. Specifically, with the company's bot PayPal users will be able to reset passwords, ask for help with refunds or payment issues, and other general account inquiries.

PayPal's new P2P solution in Facebook Messenger is debuting ahead of Apple Pay Cash, which still has an unclear launch date in a future update to iOS 11. When it releases, Apple Pay Cash will let users send money to one another within Apple's Messages app.


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PayPal Announces Over 2M U.S. Retailers Will Begin Accepting Venmo Payments Online

PayPal today announced that "more than two million" retailers in the United States will now accept online payments from the PayPal-owned, peer-to-peer payments platform Venmo. Users with Venmo accounts will be able to pay on retailer apps like Forever 21, Foot Locker, and Lululemon starting this week (via Reuters).

With the addition of Venmo into the checkout process of these apps, Venmo customers can use their app balance, linked cards, or bank account to shop on the mobile sites of "almost all merchants that accept payments with PayPal." The peer-to-peer payments app will appear as a checkout option similar to PayPal and other mobile wallets.

“At Venmo from the very early days our vision was to always let you use it for whatever you want to buy,” Ben Mills, head of product, at Venmo, said in an interview.
Venmo will charge merchants fees for processing payments through its platform, with Venmo head of product Ben Mills stating that the service's ease of use "could help increase" the company's sales.

Another update coming down the line -- first announced over the summer -- will let users transfer their app's balance to their bank account instantly, for a transfer fee of $0.25. Currently, Venmo transfers to bank accounts are free, but take up to a day to complete.

PayPal is said to be looking to bolster Venmo's stance in the peer-to-peer payments market following the launch of Zelle earlier in 2017, and the impending debut of Apple Pay Cash. However, PayPal CEO Dan Schulman has said he doesn't think Apple Pay Cash will hurt Venmo, mainly citing Venmo's availability across platforms as its leg up on Apple's iOS-only P2P payments.

Tags: PayPal, Venmo

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