A PayPal-run promotion provided a measurable mobile payments boost for Van Leeuwen Ice Cream Artisans, suggesting there's an appetite for a type of mobile payment that rival companies like Square have abandoned.
"It was one of the best days we've ever had for PayPal," said John Okon, general manager of Van Leeuwen, which has locations in Manhattan, Brooklyn and Los Angeles, adding the "National Ice Cream Day" offer on Sunday, July 20, boosted PayPal mobile payments to 5% of sales, up from the typical 3%.
The results suggest there's some life for a form of mobile payment that other companies such as Square have dumped. Though PayPal describes its app's feature as an "order ahead" function, it requires consumers to first visit a store to check in and place an order. Square, by contrast, scrapped this model for an order-ahead app that lets users place orders before they arrive at the merchant's location.
While more detailed information on the consumers who responded to the offer wasn't yet available, the promotion was successful in drawing people to adopt mobile payments, Okon said. "It's a great forward-thinking way to do business so we're expecting more use in the future," he said.
To mark "National Ice Cream Day," an unofficial event that dates to the Reagan Administration, PayPal urged consumers to use their PayPal apps to check into ice cream stores and get a $5 discount. Other PayPal merchants participating in the event included Chikalicious Desert Club, Chocolate Bar, M'o Gelato, Victory Garden NYC, Mia Chef Gelateria and Albero Dei Gelati. PayPal did not comment on the results of the promotion.
PayPal users were able to open the payments app to check in and see a location-based offer for a discount at the nearby ice cream store. The consumer could then purchase an ice cream and receive it at the point of sale.
Van Leeuwen has accepted mobile payments via a PayPal and the mobile point of sale vendor ShopKeep partnership for about three months, and the store's Manhattan location is ahead of the other locations in mobile payment revenue, Okon said.
PayPal and ShopKeep conducted a similar test of the check-in model of payment at a New York film festival in late 2012. The test produced hundreds of transactions, though ShopKeep had hoped it would have produced thousands. ShopKeep did not return a request for comment for this article by deadline.
Nevertheless, "people who used it used it multiple times," ShopKeep CEO Jason Richelson told PaymentsSource after the 2012 test. "We definitely had a lot of fun with it."
The music festival test was focused on people who were already at the event and wanted to try a new way to pay. The ice cream day test, by contrast, was designed to attract "people who may not have come in otherwise" and were attracted by a location-based offer appearing in the PayPal app, Okon said.
The payment process is designed to be painless for the consumer, said Gita Chandra, a spokesperson for PayPal. "The payment for the offer goes through just like any other payment, the consumer doesnt exit the PayPal account, which is nice."
Okon said the technology has worked well for Van Leeuwen stores, but there was a slight learning curve for the staff.
"At first the staff was a little confused as to how to use the app," he said. "They weren't sure if they were supposed to collect money from the consumer. But it was a quick learning experience. The process is pretty self-explanatory."
Van Leeuwen has not marketed mobile payments outside of the PayPal app, Okon said. "It allows PayPal to advertise for us by sending notices out," he said.
PayPal has also used ice cream to attract spending with the U.K. launch of its PayPal Here mobile card reader. The Greedy Goat, a London-based goat's milk ice cream vendor, was among the first merchants to use PayPal's device in the U.K.
The latest ice cream promotion gives PayPal a chance to publicize mobile payments directly to consumers via PayPal's app. In a recent column in PaymentsSource, Euromonitor International Analyst Michelle Evans argued that perks embedded in the mobile payment app can entice consumer adoption.