With mobile commerce (m-commerce) taking off in a big way since the start of 2010, PayPal says it is keen to ride this wave by building a strong ecosystem for developers and businesses so they can better integrate the company's technologies.
Laura Chambers, senior director of PayPal Mobile, said in an interview Friday that the company transacted more m-commerce deals in the first quarter of 2010 than the whole of 2009, indicating the platform is finally taking off.
In fact, the company expects to help transact over US$500 million of m-commerce deals by the end of the year. In comparison, it handled only US$141 million worth of mobile transactions in 2009, Chambers told ZDNet Asia.
To keep the momentum going, PayPal earlier this year released its Mobile Payment Library application programming interface (API), which is currently available to developers working on Apple's iPhone and iPad devices as well as Google Android-based smartphones, she said.
She added that this was introduced to help resolve one of the primary challenges that m-commerce face: payment process for mobile users oftentimes can be "complex and cluttered".
Chambers explained: "What some users experience when they want to check out and make payment for products in their shopping cart, is that the app will prompt them to enter a full Web site and they have to key in personal details like their credit card number, address, full name. This turns people off when they have to do it on their mobile phones."
With Mobile Payment Library, she said merchants can better integrate their online shopping site with the mobile platform while consumers can enjoy a simple, fast and secure checkout experience on their smartphones.
Mobile brand visibility
Besides simplifying the payment process, the PayPal executive told ZDNet Asia that "merchant visibility" is another challenge the industry has to overcome.
"Big brands" currently enjoy significant user recognition but this is not the case for smaller companies, she said, and noted that PayPal is looking at ways to provide a more level playing field for all merchants.
According to Chambers, mobile payment apps that have gained traction in the market are those that have simple user interfaces that provide "great user experiences". These programs typically also include elements such as push notifications, location-based services and "personal and social" elements.
Companies should also not "mess up" a good app by cluttering it with full Web page features, she urged. Rather, she suggested that they look at integrating "rich mobile features" that are optimized for phone platforms.
Asia to lead the way
Citing figures from Informa, Chambers noted that the worldwide m-commerce market for physical goods is expected to grow from US$30 billion in 2009 to US$237 billion in 2012.
Of the US$30 billion generated last year, the Asia-Pacific region accounted for US$24 billion, she said. This number is expected to rise to US$139 billion in 2012.
"As you can see, Asia-Pacific has the lion's share of m-commerce market globally, which is why PayPal is very focused on our mobile business and opportunities in this region," she added.
According to research firm Gartner, 41.8 million mobile users in the Asia-Pacific region used their devices to make payment last year. This number is projected to hit 62.8 million by the end of 2010. Worldwide, the number of mobile payment users is expected to surpass 108.6 million this year.
Rahul Shinghal, PayPal's Asia regional head of mobile product, who also sat in for the interview, said 20 percent to 25 percent of online commerce in Japan now comes from the mobile platform. Since the country usually has a "five- to seven-year headstart" on the other Asian countries, he noted that m-commerce can be expected to grow steadily across the region.
Shinghal added that out of more than 1,000 downloads of the company's Mobile Payment Library software, to date, the majority of requests came from China. He pointed out that by integrating the PayPal payment tool, Chinese merchants can now "reach out to the Western market" which was previously closed off to these local enterprises.
Shinghal also highlighted Malaysia and Singapore, which is PayPal's international headquarters, as other key markets in the region for the payment service provider. He cited collaborations with Malaysian mobile network operator Maxis and the Infocomm Development Authority of Singapore (IDA) as proof of its commitment.
The Maxis-PayPal collaboration is a "world's first" involving a mobile network operator and an online payment service provider, according to a joint press release in May. Together, both companies will bring e-commerce across three platforms--online, mobile and in the future, Internet Protocol TV (IPTV)--to customers using a Maxis-PayPal Account.
A previous ZDNet Asia report also highlighted PayPal's participation in the IDA's Digital Concierge project. The Singapore ICT regulator had selected six companies, including PayPal, in April to collaborate and jointly invest S$10 million (US$7.14 million) over the next two years to drive growth in the local mobile services ecosystem.
"This is the first time anywhere in the world where we are collaborating with a government agency on a mobile commerce platform," said Farhad Irani, vice president of PayPal Asia-Pacific, in the press statement.
Future of m-commerce
Such projects aside, PayPal is banking on the increasing adoption of smartphones and data usage to spur m-commerce, said Chambers.
She predicted that in 2013, some 37 percent of globally shipped phones will be smartphones and 10 percent of e-commerce transactions will be conducted via mobile devices.
"With every smartphone shipped today, we see an uptick in m-commerce activities," she added.
While feature phones are still predominant in many parts of the world, she pointed out that most users transact on smartphones, and that is why PayPal is working closely with Apple and Android developers.
As for features users are requesting for, Shinghal said that in the Asia-Pacific region, payment services for "movies and air tickets" are high on their wish list.
Other areas that are generating much user interest revolves around "time-sensitive deals and travel and entertainment", he added.