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PayPal boosts mobile purchasing with One Touch

The move marks a significant advancement for eBay-owned PayPal in the increasingly competitive mobile-payments space, where players like Amazon and the major banking companies are also seeking to gain traction. One Touch offers similar functionality to the Venmo Touch service offered by PayPal’s Braintree division, but on a much wider scale due to PayPal’s reach.

“The new One Touch payment experience evolves what Venmo Touch originally offered when we launched in 2013,” said Anuj Nayar, senior director of global initiatives, PayPal. “Venmo Touch was an industry-first, one touch buying experience enabling consumers to pay across apps without having to log in, even on the first purchase. Today’s announcement extends that one touch purchase experience to PayPal’s 152 million active users.”

The new payment function is in a beta test with select merchant developers, but PayPal said it plans to expand it more broadly in the coming weeks.

Driving mobile commerce
PayPal’s effort comes as merchants look for better ways to convert mobile shoppers to mobile buyers. Mobile, particularly as it refers to smartphones, is often viewed as a platform for search.

The One Touch solution from PayPal seeks to drive mobile commerce past some of the hurdles that have been seen as slowing its growth, including concerns over security and the time-consuming process of re-entering payment-card information on each shopping occasion.

PayPal said security is enhanced by the fact that potentially fraudulent activity could be detected and identification of the user confirmed in real time, while a user is in the midst of a transaction. With credit card fraud, illegal purchases are often completed before the activity is detected.

PayPal is making One Touch available automatically next month to businesses that have implemented the Braintree SDK in their mobile commerce applications. PayPal launched Braintree earlier this summer.

Other payments platforms such as Google Wallet and Isis have been slow to gain merchant and consumer adoption because they are not available on enough phones and many merchants still do not have the necessary hardware in place to process payments with these platforms (see story).

PayPal’s launch of One Touch follows by about a month the debut of its test of a new loyalty program called PayPal Select. That program seeks to promote use of the digital-payments network by offering more rewards for its most active members.

PayPal Select launched by invitation only based on users’ history on PayPal and follows by about 18 months the cancelation PayPal’s previous loyalty program, PayPal Advantage. As PayPal looks to continue to build its volume of use on mobile devices off of eBay, driving repeat use and loyalty will be key (see story).

EBay said it has seen double-digit gains in volumes via mobile, including a jump of 68 percent in the second quarter, which is being driven in part by PayPal.

“The reason for the increase in mobile usage on PayPal is that people are buying goods and services through PayPal not only from eBay’s platform, but also from other shopping websites too,” said Puneet Sikka, an analyst with Market Realist. “Plus, PayPal provides the convenience of one-click payments without entering credit card details, as users find it inconvenient to enter credit card details on the small screen of their mobile devices.”

Final Take

Mark Hamstra is content director at Mobile Marketer, New York