PayPal to corner mobile payments market with Fig Card acquisition
EBay Inc.-owned PayPal has acquired mobile payments start-up Fig Card to further its strategy of being at the center of the new mobile-focused retail landscape and driving innovation in mobile payments.
Fig Card helps merchants accept mobile payments via a USB device that plugs into the cash register or point-of-sale terminal. Customers just need the Fig app on their smartphone to be able to conduct transactions.
“In my job, I get the opportunity to talk with a lot of merchants,” said Peter Chu, senior director of PayPal Mobile, San Jose, CA. “And they see the same thing we do: Retail is changing quickly.
“The lines between online and offline commerce continue to blur – thanks in large part to technology innovation in mobile,” he said.
“PayPal is extremely focused on being at the center of this new retail landscape and driving innovation in mobile payments.”
With this acquisition, which came on the heels of eBay Inc.’s buyout of Where, it is clear that eBay is looking to corner the mobile commerce market (see story).
PayPal claims that the acquisition is a perfect synergy, as Fig Card shares its belief that mobile payments are much smarter than paper.
Fig Card becomes PayPal
Fig leverages existing hardware in smartphones to create a system that checks off a number of boxes towards solving merchant and customer adoption challenges.
No additional hardware is required on the customer device.
Also, payment information is not directly given to the merchant. That means no credit card numbers, debit account information, or other potentially sensitive information is given to the merchant.
At the same time, Fig can still manage loyalty programs and other identity-based systems for the customer and merchant.
A typical transaction will complete in less than 10 seconds, the company claims.
The merchant POS system verifies that the consumer is the owner of the device via a photo and the consumer just taps “pay” to complete the transaction
While other systems use email or other external channels to deliver receipts, Fig manages them within the application in real time. This enables features such as social publishing. For example, users can tweet their lunch.
“We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal – in the future, transactions can be as smart as a computer and not as dumb as paper,” Mr. Chu said.
“We won’t need our physical wallets,” he said. “We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy.”
Fig Card founders Max Metral and Hasty Granbery will be joining the PayPal Mobile team as part of the acquisition.
Prior to founding Fig, Mr. Metral and Ms. Granbery led a series of successful companies.
In fact, Mr. Metral was the cofounder and chief technology officer of Firefly, where he helped define many of the governing principles of privacy on the Web that are still used today.
Firefly was sold to Microsoft, and he went on to architect Microsoft Passport, one of the first single sign-on systems, per Mr. Chu.
“There’s a lot of exciting innovation happening within the walls of eBay and PayPal – and even more so with the tens of thousands of developers who use our platform around the world,” Mr. Chu said.
“It’s inspiring to come to work every day and interact with some of the best minds in technology and payments,” he said.
“I couldn’t be more excited to welcome two more to the PayPal team.”
Here is a demo of Fig Card