A few weeks ago we reported the launch of the Paypal Text To Buy service that allows pre-registered users to text a message to a number or short-code to make instant purchases. Intrigued by how a brand could use such a system, we thought we’d ask Kevin Dulsky, senior director of mobile payments for PayPal, a few questions.
PayPal seems to be in such a strong position on the web, why did it feel like it had to move to mobile too?
PayPal is a leading online payment method, and our business on the Web is very strong. In fact, we just surpassed 105 million accounts worldwide, and PayPal processed $27 billion in payments in 2005.
With the success that PayPal has seen on the Web, and with the overwhelming popularity of mobile phones, the time has never been better to bring the two together. PayPal already has millions of customers that have entrusted their personal and financial information to PayPal. And we bring the same industry-leading security systems to mobile payments that we’re known for in the online world. Financial information is never shared with the merchant or recipient – PayPal stores all of that information on our own secure servers, so consumers don’t have to send it over the airwaves. And every transaction is protected by a PIN number, just like an ATM card.
The bottom line is that consumers are ready for m-commerce, and PayPal provides a very convenient, safe way for them to pay for items anytime, from anywhere. It makes strong business sense for PayPal to make the move to mobile.
Is Text to Buy a direct competitor to Premium SMS?
No. Because the PayPal Mobile service rides on top of the existing SMS system used for text messaging, we think over time it will drive significant text messaging volume to all of the carrier networks.
What type of retailer would suit this system best?
Right now, PayPal is focused on large, brand-named retailers that sell physical goods via traditional advertising channels. Already, PayPal Mobile users can Text to Buy items from merchants like the Bravo Network, Fox Home Entertainment, the NBA, Universal Music, and MTV. We also work with several leading charities such as UNICEF, The Starlight Starbright Children’s Foundation, and Amnesty International.
What are the implications for marketers? Can you give a couple of examples of the way a marketer could use the system?
The implications for marketers are incredible. Text to Buy opens up a new, direct channel to reach customers. It also delivers a whole new way to measure the effectiveness of advertising, since customers can buy products right when the marketing message reaches them – at the moment they see the ad.
For example, FOX Home Entertainment is assigned a specific mobile code for a “Walk the Line” DVD – that code is “CASH” (as in Johnny Cash). A consumer sees an ad for the DVD while reading a magazine. All she does is type a text message to PayPal, and in the message she types “CASH.” PayPal will call her back to confirm the transaction by asking for her secure PIN. The DVD will arrive a few days later at the address registered with her PayPal account.
Merchants are coming up with innovative ways to integrate m-commerce functionality. Bravo Television is a charter partner with PayPal Mobile and is using the service to promote the network’s new show, “Top Chef.” During the show, viewers see ads for “Top Chef” merchandise, and they can Text to Buy these items with the code shown during the advertisement.
The implications for charities is also very exciting. Text to Give provides a very immediate way for potential donors to give money during charity events, fundraisers, or concerts — when they are most compelled to give.
Will the phone become our wallet?
It’s still early, but we think consumers are ready for anytime, anywhere payments. Already, consumers are using their mobile phones for much more than just talking – they’re sending e-mails, listening to music, taking pictures and making videos. Providing a safe, easy, convenient payment method provides even more utility to the mobile phone. We think the opportunity ahead is very exciting.
What next for Text to Buy?
PayPal Mobile has been well received by users and businesses to date. We’re working with several additional merchants to integrate Text to Buy, and we will be sure to follow up with you when we have more to announce. Stay tuned!
Can’t wait. Thank you.
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