PayPal is ending older mobile in-store payment services

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PayPal Holdings Inc. is ending two mobile in-store payment services it launched several years ago to much fanfare.

The company emailed customers on Tuesday telling them the checkout services, one using a phone number and PIN and the other using special payment codes in stores, will no longer be available as of March 31 in participating stores.

“When this payment experience was developed there were some technology limitations and this was a way for us to engage with our customers, giving them the ability to make a purchase at the point of sale,” PayPal spokesman Joseph Gallo wrote in an email. “As mobile technology has become smarter, we are looking to engage with our customers in ways that leverage the true potential of the mobile device and their PayPal wallet.”
The company launched its phone-number-and-PIN service in 2012, becoming an a rival payment network to Visa Inc. and Mastercard Inc. at retailers including Home Depot Inc., Toys ‘R’ Us Inc. and Office Depot Inc. PayPal shares rose at the time on hope the move would give PayPal access to a much larger payment market beyond online purchases.

The offering was heavily pushed by former EBay Inc. and PayPal chief John Donahoe, but it failed to catch on and caused tension with Visa and Mastercard. Since then, EBay and PayPal split into separate companies and Donahoe left.

The new PayPal CEO Dan Schulman has partnered with Visa, Mastercard and a host of other traditional industry players to transform PayPal from a payments button on websites into a versatile financial tool for everyday use, even in brick-and-mortar stores. In August, PayPal even launched a credit card. Those moves have helped growth and PayPal’s stock has nearly doubled over the past year.

PayPal is now an in-store payment option inside services from some of the largest smartphone and mobile technology companies, including Samsung Pay and Google Pay. There’s no such in-store option through Apple Pay yet, PayPal’s Gallo said.

“The team is also working with a number of retailers directly to create customized in-store experiences that leverages mobile in a meaningful way for their customers,” he added.

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