PayPal Inc.’s impending move into face-to-face transactions enabled by VeriFone Systems Inc. mobile point-of-sale terminals has the eBay unit developing a reseller program, Laura Chambers, PayPal senior director of mobile, tells PaymentsSource.

“We will work proactively with independent sales organizations to ensure the [mobile] business model works,” Chambers says. Details are not yet available because the program is in its early stages, she says.

The VeriFone-enabled PayPal acceptance service should be available after Jan. 1, the terminal maker says.

PayPal is a strong competitor for e-commerce transactions. In 2009, PayPal, which like VeriFone is based in San Jose, Calif., handled $72 billion in payment volume, a 20% increase from $60 billion the previous year. PayPal’s merchant-services segment processed $39.5 billion in payments last year, up 33.9% from $29.5 billion in 2008, PayPal says.

VeriFone PayWare Mobile users that have Apple Inc.’s iPhones would be able to accept PayPal funds by bumping their phones with PayPal users’ iPhones under an agreement between PayPal and VeriFone (see story). 

The agreement also calls for VeriFone to use its PayWare Mobile card-encryption sleeve to expand PayPal payment acceptance via mobile phones and to integrate PayPal with online and point-of-sale environments. In addition, the terminal maker would promote PayPal and the bump funds-transfer function to its reseller channel, and PayPal would market PayWare Mobile to its user base.

“Merchants tell us they want us in more of these transactions,” Chambers says.

Two years ago, PayPal had $25 million in mobile transaction volume, and it expects to handle more than $700 million in such volume this year, she says.

PayPal in October also added Bling Nation Ltd. payment functionality to its iPhone app (see story). That followed the September VeriFone announcement that it was adding Bling Nation acceptance to its terminals (see story). 

Bling traditionally has relied on community banks to make deals with local merchants for its alternative payment scheme, but it now is banking on deals such as the ones involving PayPal and VeriFone to grow even faster.

PayPal is working closely with VeriFone to develop the reseller program, Chambers says. “We are working with VeriFone to get the right model,” she says.

For its part, VeriFone says its reliance on ISOs as a sales channel is an important element to the PayPal deal.

ISOs, and processors, will have another payment method to talk to merchants about, Paul Rasori, VeriFone senior vice president of global marketing, tells PaymentsSource.

Realizing some individuals may be concerned about PayPal’s growth, VeriFone and PayPal “understand the value” of ISOs and their sales agents, Rasori says. “We don’t have a direct-to-merchant strategy whatsoever,” he says.

For PayPal, there has to be a revenue share to get access to VeriFone’s sales channel, Rasori says. He expects the amount will be “in line with what [ISOs] typically make from normal credit and debit card transactions.”

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