EBay Inc.’s PayPal saw a 300 percent increase in mobile payments from the official start of the shopping season on Nov. 15 through Dec. 15 compared to the year-ago period.

Consumers are clearly taking to mobile shopping this holiday season like never before. PayPal is expecting to close the year with more than $700 million in total payment volume via the mobile medium.

“PayPal sees that the future of money is mobile,” said Bill Zielke, Timonium, MD-based senior director of merchant services at PayPal. “The wallet people carry in their pocket today will be in the cloud tomorrow and mobile is how they will access it – it is becoming the Web.”

Mobile Commerce Daily’s Dan Butcher interviewed Mr. Zielke.  Here is what he had to say:
 
To what do you attribute the huge surge in mobile payments via PayPal this holiday season compared to last year?
With more than a 300 percent increase in mobile payments from the official start of the shopping season—Nov. 15—until Dec. 15 compared to the same period last year, it is clear that PayPal is changing the way people shop and pay during the holidays.

Demand for mobile shopping and buying has been steadily growing, but it is now taking off.

We unveiled Mobile Express Checkout this year so that retailers could capture sales from this fast growing channel this holiday season.

As a result, our merchants have seen success, including more sales over the busiest shopping time of the year. 

The main reason mobile shopping is growing is because of the increasing number of consumers using smartphones.

Consumers are turning to their phones to aid in the shopping experience, whether it is scanning a bar code to comparison-shop or check for the best prices online.

This is the first holiday season where these technologies have been such an important tool to consumers and retailers.

What is driving growth in the space of mobile commerce and payments?
Consumer demand for a convenient and safe shopping buying experience is also driving a lot of the industry’s growth, particularly with younger affluent buyers who regularly use their phones and other mobile devices.

Many merchants have told me the same thing, that they feel they need to offer their mobile customers a secure, seamless and holistic experience.

Shoppers are not looking for additional “channels” – they are just trying to shop in a convenient and safe way.

They want to feel as comfortable shopping on their phones as they do online and a lot of merchants understand that concept and have seen a lift in sales as a result.

This younger generation of consumers is showing merchants that they want to use their phones to shop and merchants are reacting to that desire by putting their resources into their mobile Web sites and native applications. 

How has mobile transformed the holiday shopping experience?
With a number of major brands jumping on board with mobile commerce, it is clear that the rules dictating a successful holiday shopping season are changing.

Consumers carry their phones with them wherever they go and many are using them to comparison-shop with tools like bar-code scanning and geolocation technology.

Our PayPal Mobile application has a location-based feature that allows smartphone users to find businesses accepting PayPal wherever they are this holiday season.

In-store shopping is only one part of the equation, though.

During a critical time of year for almost every kind of retailer, merchants need to offer the easiest, most seamless checkout process they can.

Mobile shoppers are far more likely to follow through with a purchase when they are not bogged down by resizing their screens, entering credit card info and being taken to slower checkout sites not optimized for mobile devices.

We think we have come up with a remarkably good product with Mobile Express Checkout, which provides shoppers with as comfortable a checkout experience on their phone as they have online.

What is the outlook for mobile payments in 2011?
In 2011, we’ll see even faster growth and a blurring of the offline and online worlds.

Increased adoption of things like augmented reality and payment applications, mobile-only deals tied to social networking and mobile payments at the point of sale is going to contribute to bringing mobile commerce to the forefront.

For merchants, mobile will mean tearing down walls around their channels and perhaps a new way to think about the point of sale.

The idea of siloing channels – bricks-and-mortar, online, mobile – is just not going to cut it anymore. 

In 2011, retailers are going to start integrating all of these channels into one because consumers are demanding it.

PayPal sees that the future of money is mobile: The wallet people carry in their pocket today will be in the cloud tomorrow and mobile is how they will access it – it is becoming the Web.

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily