PayPal Inc. has corralled a deal that brings its PayPal Payments options to the forefront and may pose a threat to ISOs and agents.
For the first time, DocuSign Inc. will offer its users who issue or obtain electronic signatures on contracts, agreements and other legal documents the option to collect payment simultaneously through PayPal Payments, the San Francisco-based electronic-signature transaction provider announced April 11.
“PayPal does a lot of interesting things, and the long play on this may be taking on the ISOs,” Brian Riley, senior research director and analyst with Needham, Mass.-based TowerGroup, tells ISO&Agent Weekly.
The DocuSign setup allows PayPal to possibly make more significant moves in the payments industry in the near future, Riley says. “There are tons of forms that have payments attached, but also tons of forms involved in the acquiring and processing business,” Riley says.
The ability to obtain e-signatures on those forms quickly could fit into PayPal’s plans, Riley suggests.
It may take some time to develop, but PayPal could use its partnership with DocuSign to begin acquiring merchant business on its own and circumvent the merchant acquirers and ISOs to seek more clients, Riley contends.
A week ago, PayPal, a unit of San Jose, Calif.-based eBay Inc., announced its PayPal Payments option as a way to aid small businesses and stressed the company has expanded beyond its former role as an online payment provider.
Ed Eger, PayPal senior vice president and general manager of PayPal Americas, views PayPal Payments as a step that bolster the company’s progress as an option for consumers and merchants for any type of payment.
“Helping small businesses get paid is PayPal’s sweet spot,” Eger wrote in his April 5 blog when touting PayPal Payments.
Providing payments for business transactions is a logical new step for PayPal because the company has been “revolutionizing the payments industry for the past 14 years, first with online payments in 1998 and then with mobile payments in 2006,” Eger wrote.
PayPal executives were not available for comment, but Eddie Davis, senior director of North America Partnerships at PayPal, stated in a press release that the company is “excited to be the first payment processor to work with DocuSign to make transactions completely digital so they are simple, fast and secure.”
The partnership marks DocuSign’s first venture into offering a payments option it will call DocuSign Payments for the 15 million customers who use the e-signature service, Gregor Perotto, director of corporate marketing for DocuSign, tells ISO&Agent Weekly.
PayPal originally touted PayPal Payments as an ideal option for small businesses, but Perotto suggests working with DocuSign potentially will expose PayPal to larger businesses and transactions.
“This could be huge for PayPal because our customers range from individual consumers to professionals such as lawyers, insurance companies and contractors to large business departments for major insurance companies,” Perotto says.
Since DocuSign began its service in 2003, the company has provided e-signatures for more than 120 million transactions, most of which have included a payment aspect, he adds.
PayPal would process DocuSign Payment transactions in a matter of seconds, which complements DocuSign’s mission of completing transactions quickly with e-signatures on documents and contracts that otherwise could take days to process, Perotto notes.
Customers can set up payment processing with PayPal through DocuSign’s website by selecting an “enable payment processing” button and designating a PayPal account for payment transfers, a DocuSign press release noted. Customers who do not have a PayPal account can set one up during the process or opt to pay with a credit card.
DocuSign offers the payments service to customers as an optional add-on to the DocuSign for Business or DocuSign for Enterprise software editions, the company stated. Customers pay rates based on the number of payment transactions required.
It is not unusual for some of the larger insurance companies using DocuSign to issue millions of documents a year that would call for payment processing, Perotto says.