Single life nears for PayPal as it approaches its emancipation from parent company eBay, a split ostensibly designed to let each company play to its unique strengths.
“PayPal will always be vitally important to the success of eBay and vice versa,” said Robert Clarkson, VP, GM, North America, merchant and retail solutions at PayPal, in an interview with AdExchanger.
The move to operate as two separately traded entities “allows both organizations to focus on the things that are really driving our businesses without worrying about partnerships we set up that might be strictly beneficial to PayPal or beneficial to eBay,” he added. “We can both grow in parallel paths while using our own strengths.”
PayPal’s strength is its merchant relationships. Clarkson said much of the innovation is happening in mobile to link the in-store and online worlds of PayPal’s 700 retailer partners in the US and Canada. PayPal uses a solution called One Touch, which allows consumers to log in once with their PayPal identity and pay in multiple retail apps.
“That one-touch functionality is a critical avenue for us because the consumer wants to see, buy and get with as minimal issue as possible,” Clarkson said. “Mobile is this massive component in between in-store and web-based transactions and we’re seeing tremendous growth there with billions of transactions.”
PayPal isn’t alone in this observation. Amazon already has one-click checkout and Apple Pay enables single-touch payments for merchants through Stripe.
PayPal, however, provides recommendations to hundreds of merchants based on the 157 million consumers worldwide that tap its processor during checkout. Its marketing copy boasts about how PayPal accesses “a wealth of data that can help a business make better and smarter decisions.”
These data sets led PayPal to launch a service called PayPal Business Consulting, which Clarkson said helps retailers understand things like site conversions, abandonment rates and optimal website flow.
“We’re making this data, analytics and overall accountability available to merchants across the PayPal spectrum, as opposed to doing one-off projects for merchants of various sizes,” he explained. Last year, PayPal did 213 projects, which resulted in about $1.4 million in incremental revenue for several of those participating merchants.
Although PayPal doesn’t normally charge for these agency-like services, Clarkson said there are billable exceptions, such as designing an app or writing code for a retail site. Additionally, PayPal is performing lookalike modeling on behalf of merchant partners to help with new customer acquisition in some of its client retentions as a paid service.
“We work with large retailers who have a sophisticated CRM machine – a customer relationship, analytics and data engine – but it’s fairly limited to their customers and we bring all the other customers that they don’t currently have,” he said.
PayPal looks at the kinds of promotions, activities and checkout flows that generate the most new customers and help foster loyalty.
“We have the ability to take a consumer database from a merchant, match it to our consumer database and find similar, but supplemental consumers,” Clarkson said. This data is manifested, for example, in promos that can be served to mobile via PayPal Media Network. “Obviously there are benefits downstream for PayPal if we can help that merchant become more successful and generate more transactions with new consumers.”
Clarkson said PayPal’s strategy to date has been to bring tech and talent in-house to strengthen its own data play. It acquired, for instance, mobile shopping app Redlaser and mobile ad network WHERE (now PayPal Media Network).
But time will tell if these assets will keep the company viable independent of eBay, particularly if eBay data stays with eBay, which is launching a separate mobile ad network.
