PayPal Inc., an alternative payments provider that often bypasses ISOs, has revealed that 15 new national retailers eventually will accept PayPal payments. The company also has signed agreements with terminal makers and point-of-sale software vendors that will significantly increase PayPal’s presence as an option in bricks-and-mortar stores.
New national retailers that soon will accept PayPal include Abercrombie & Fitch, Advance Auto Parts, Aéropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, JC Penney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms To Go, Tiger Direct and Toys “R” Us, PayPal President David Marcus announced at a press conference in San Jose, Calif.
“We can’t wait to launch with these great retailers and help them serve their customers better through PayPal,” Marcus said.
PayPal, a unit of eBay Inc., has long provided online payment options, but in the past year has moved into the brick-and-mortar retail realm with a payment card tied to the company’s digital wallet. PayPal users can also make purchases by typing their phone number and a PIN at the point of sale.
PayPal initially conducted tests using a PayPal payment card at Home Depot Inc.
The retailer has since announced that PayPal’s payment method would be accepted at all of its 2,200 stores nationwide.
Besides announcing the new retailers, PayPal prepared for the conversion of literally thousands of point-of-sale terminals to accept PayPal payments through separate agreements with San Jose, Calif.-based VeriFone Systems Inc., Scottsdale, Ariz.-based Equinox Payments LLC and software providers Tallinn, Estonia-based Erply Ltd., Leapset Inc., ShopKeep.com Inc. and Vend Ltd., Marcus said in a blog post.
Marcus indicated the barrage of agreements continues momentum the company built with its PayPal Here mobile card acceptance app.
The agreement with VeriFone calls for the terminal maker to add a PayPal digital wallet payment option. It will also include the PayPal option to all future terminals, says VeriFone spokesman Pete Bartolik.
Equinox Payments plans to do essentially the same thing, announcing that it has already added PayPal card and card-free software onto its new L5300 terminals. In addition, retailers who already have the terminals can update the software through a “key injection” system in which the retailer would not have to send in a terminal for upgrading, Equinox said in a press release.
Clint Jones, president of Equinox, said three of the top 10 retailers in the U.S. use Equinox terminals, paving the way for PayPal’s potential exposure to more retail sites.
Will Rossiter, senior vice president of sales and marketing for Equinox, says many of the company’s clients plan to work with PayPal. He declined to name them.
PayPal’s arrangement with Erply represents a software-based mobile payment method in which applications on Erply terminals at up to 46,000 stores in the U.S. will communicate with PayPal software on Google Inc. Android handsets or Apple Inc. iPhones to complete payment transactions, says Kristjan Hiiemaa, CEO of Erply.
“This represents a new way to pay at Erply terminals, with no plastic card swiping,” Hiiemaa says. The system allows the merchant to send back coupons or instant rebates for using PayPal, making it potentially a better choice than Near Field Communication, which is commonly associated with immediate mobile payments, he contends.
PayPal has been developing payment capabilities at the POS, but the Home Depot arrangement simply established acceptance of PayPal payments, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
“So far, PayPal has not shown a compelling reason for people to use PayPal at the point of sale,” Luria says. “So that’s what I think would be next for them, having retailers tie in promotions or offer programs and discounts for using PayPal."