Scott Thompson, The president of PayPal, not the actor from Kids in the Hall, sees a very bright future for PayPal. In fact, he is so optimistic at its success that he reassures the board of eBay, the parent company, that he is not trying to overtake them every time they meet.
In all reality, the board knows full well that by 2014, PayPal's revenue will be larger than eBay's. Why? Because PayPal deals with over 8 million merchants around the world - one of them is eBay. They are able to grow like this because they see trends in technology, implement them better than anyone and then own the market. The next technology they plan to own is mobile payments.
To see how they plan to do this and for a little history on the company, hit the break.
PayPal started as a demonstration for a payment processing system that had been developed that would allow online retailers to process credit card payments easily through their API. They sold the service a few times, but something unexpected happened. Google indexed their demo site. From there, eBay sellers found it and thought it was a legitimate payment system and started processing transactions. The company knew they had a winner and abandoned the original product and built PayPal until they sold it to eBay in 2002.
From there, the service has taken over. You can't buy online from anyone without seeing the PayPal logo - from Best Buy and RadioShack to United Airlines. However, unless you have a PayPal debit or credit card, you probably can't make too many in-store payments from your PayPal account. This is where they want to grow.
Imagine using your phone and a technology similar to what we saw on Sony's cameras at the Consumer Electronics Show 2010, which allows you to transfer information between two devices that are very close together, to make payments right from your handset. No credit card needed, just your phone. It is one step closer to not having to carry a wallet around with you.
Of course, if you know anything about PayPal, you know you would be able to choose the source of the payment - be it Vis, MasterCard, bank account or debit. No more cards to carry.
They are already up against AT&T, T-Mobile and Verizon who are already working together on a near-field technology for payments, but if PayPal gets in there first and can offer a sticker to place on or in your phone to facilitate the transactions, with their already huge user-base, it would certainly dwarf the carriers' ability to implement the same thing.
The only thing now is to get retailers behind the technology. Pinpads would have to be upgraded or replaced in stores across the world to give them the ability to take PayPal mobile transactions. If PayPal can keep the transaction costs down as much as they have online, however, it will be easy to convince the retailers to join in.
Would you use your phone to make payments in the grocery store, gas station or other retailers? Let us know in the comments.