PayPal has begun testing a new loyalty program called PayPal Select that seeks to promote use of the digital-payments network by offering more rewards for its most active members.

The program 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).

“The challenges for the ‘offer’ part will be the same as any other deal/offer program – namely the quality of the offers and inbox-offer fatigue,” said Jeremy Gumbley, chief technology officer, CreditCall, New York. “I think like any big-screen concept that gets downscaled onto mobile, there is the challenge of how to hook people in the first couple of screens.”

CreditCall is not involved with PayPal Select, but Mr. Gumbley agreed to comment based on his expertise in online/mobile payments.

PayPal was not available for further comment about the the new loyalty program. The payment platform is a division of San Jose, CA-based online auction giant eBay. It offers both a mobile app and an m-dot site for mobile payments.

‘Keep shopping’
When a reporter from Mobile Commerce Daily attempted to sign up for the service through a seldom-used PayPal account, a PayPal response screen rejected the request. The screen stated that the reporter should “keep shopping” using PayPal to become a member.

“You aren’t a Select member yet, but you can get there simply by using PayPal for your online shopping,” the screen stated.

It was not immediately clear how PayPal Select might differ from PayPal Advantage, a loyalty program for high-value users that was launched in 2011 and canceled in January 2013. PayPal Advantage offered similar-sounding benefits: priority customer support and access to exclusive offers and early access to deals.

In order to enroll in PayPal Advantage, users had to spend $5,000 in a 12-month period using PayPal, and then had to spend $5,000 each year thereafter to remain enrolled. The company replaced PayPal Advantage by giving members exclusive access through 2013 to PayPal Price Match, which offered to reimburse the difference if users found merchandise priced lower than the price they paid using PayPal.

PayPal’s shift to the new loyalty program comes as the digital-payments space is heating up with more functionality around mobile wallets and with the announcement July 16 from Visa that it is rolling out Visa Checkout. That service promises to facilitate mobile commerce by allowing users to store digitized payment-card information with Visa itself, rather than the merchants (see story).

Wary users
PayPal users appeared to have been wary of the email notices they received concerning PayPal Select, given the large volume of fraudulent offers that have been disguised as coming from PayPal itself.

“I didn’t want to enter my login information/password from the email in case it was a scam, and when I login directly to my PayPal I can’t even search/find anything about it. (shrug),” wrote one poster identified as Sabitsdesigns on the Etsy.com message board.

On Twitter, several posters were skeptical of the offer to join PayPal Select, given the amount of phishing scams that seek to prey on PayPal users.

With the amount of @PayPal phishing sites out there, I’m wary of the PayPal Select site. Would have been better if both shared same URL.

— Ren Walker (@renbyrd) July 16, 2014

In a blog post promoting PayPal Select, the company said the service would afford members access to offers it has secured with “leading online retailers,” as well as “first-in-line” prioritization when contacting PayPal customer service.

“The opportunity is an interesting one,” said Mr. Gumbley of CreditCall. “If Paypal can capitalize on their vast user base to promote offers, then I suspect they could be quite successful.”

Final Take
Mark Hamstra is content director at Mobile Commerce Daily, New York