Mobile wallet payments are a hot topic as of late. With Google, Samsung, and Apple all making a bid to become the consumers payment of choice at the point of sale for brick-and-mortar stores. Then take into consideration MCX, which is a group of major chain and big-box merchants and retailers that include the likes of Wal-Mart, BestBuy, and Target. They are set to offer their own brand of mobile wallet called CurrentC sometime in the near future. Now PayPal has decided to enter the mix, and they have done so in a very smart way.
PayPal, the payment arm of Ebay, is planning to buy Paydiant according to an announcement by PayPal (source link below). Paydiant is the developer of the technology that is currently in applications from companies such as Subway, Capitol One, and the aforementioned MCX. This means that PayPal will become the main driver of some of the largest retailers in the United States when CurrentC comes online. This smart acquisition will set PayPal back a reported $280 million. Most retailers are not content to accept offerings from Apple or Google or even Samsung. They want to have an alternative that will allow them to make the customizations that their specific business model requires and that will allow them to not have to pay the fee's associated with credit card transactions. Paydiant offers this very kind of solution for the business customer. This is very appealing to business customers and could make PayPay one of the largest players in the mobile wallet space and a serious threat to Apple and Google payment systems. PayPal will also gain the ability to become the payment method of choice for mobile applications.
The acquisition is set to happen sometime in late March or April of this year and comes on the heels of PayPal's purchase of Braintree in 2013. PayPal is also set to become its own company later this year and separate itself from Ebay to become a publicly traded company. This purchase gives PayPal some of the push that it needs to move into the brick-and-mortar retail space, which has been a long and painful journey for PayPal. Competition in this space will no doubt get hotter with Google recently making a deal with major wireless carriers in the United States and of course Apple's success in the space and Samsung has announced it will introduce Samsung Pay soon. No matter what happens in the space, it is clear that the choice will be in the consumers hands. At this point, it all boils down to convenience and ease of use for the customer as to which option they will choose. With the new acquisition, PayPal might just be the one to successfully pull it off.