PayPal, the 15-year-old global ecommerce business that allows online payments and money transfers, wants to be in as many places as it possibly can to create the ultimate customer experience. Due to its collaboration with Discover, PayPal expanded its presence from 20,000 locations in the U.S. to more than a quarter of a million. By year’s end, PayPal expects to be in more than 2 million locations.
“Direct relationships we have with retailers are important and ubiquity is important,” Chris Morse, Senior Manager, Communications, PayPal, told Loyalty 360. “You can’t just be in some locations. We need to make the customer experience better, leveraging the smartphone and POS.
Morse said PayPal has direct relationships with several merchants and can create unique customer experiences. Jamba Juice is one of those merchants. Using a PayPal iPhone app, Jamba Juice customers have the option of ordering ahead, paying for it with PayPal on a mobile device, and being able to pick up their drink when they arrive at the store.
“You can pick your drink, pick your booth, and set time and location for when to pick it up,” Morse explained. “What that’s doing is allowing the customer to walk in, walk out, and leave with a better experience. For some people, if there’s a line they can bypass, that’s important.”
Morse said PayPal’s relationship with Discover is critical because it allows PayPal to be in more places. PayPal leverages Discover’s technology infrastructure.
“They (Discover) benefit from a standpoint of collaborating with us and innovating together,” Morse said. “With PayPal, we don’t just offer a single solution, not just a card, mobile, or online. We’re also able to leverage the cloud through at thousands of locations.”
Loyalty is very important to consumers and merchants alike.
“We have to demonstrate loyalty and consumers need to benefit,” Morse said.
Morse said PayPal’s closed loop offers (i.e. $10 off your next visit) can be downloaded and payment automatically is taken out of the customer’s PayPal balance.
“You’ll get a text from PayPal about the offer,” Morse said. “It’s something that definitely proves that we can add value. The click-through rates are fantastic and also the downloading of coupons and redemptions.”
The mobile phone is becoming the command center for payments, Morse said.
“It’s proving a lot of value and opportunity for consumers and merchants,” Morse said. “Consumers want to use that device and we have to come up with a solution wherever they are and want to spend money.”
Patrick Gauthier, General Manager of Emerging Services, PayPal, told Loyalty 360 that PayPal, said the definition of loyalty is very relationship-oriented and focused on accumulation and repeat behaviors toward increasing engagement.
“You need well targeted and well communicated messaging that is understood,” he said.
The average U.S. household participates in 12-18 loyalty programs, Gauthier said, but only use six.
“So six to 12 of those programs are under water,” Gauthier said. “Two thirds of retail in the U.S. is influenced by some kind of loyalty program. One could argue that loyalty is more important in the long term than promotion is.”
Gauthier said PayPal adds value by helping merchants and consumers take advantage of all the loyalty programs out there, and makes it easier for consumers to access information about benefits and rewards.
“We enable merchants to do a much better job on their loyalty strategies,” Gauthier said. “Several merchants have loyalty programs and for each of them we have the capacity to support their loyalty program. It’s intrinsically built into the wallet.”
As the lines of commerce become blurred, so too is the traditional purchase cycle.
“As the shopping journey becomes more blurred, the wallet has an extended role,” Gauthier said.
With PayPal’s Digital Wallet, customers can register gift vouchers, coupons, loyalty points, and store credit cards all under one account.
What’s more, PayPal is offering new pay-from-your-smartphone services that could render the physical wallet obsolete. These include new mobile features for shopping, eating out, and attending sporting events without using cash or a credit card.
PayPal is also making a push into the restaurant scene with PayPal Local, an app that combines features similar to customer review website Yelp and social networking app Foursquare. PayPal Local users can find restaurants nearby and check-in.
“We want to connect buying online and buying in-store, and connect those experiences together,” Gauthier said. “The wallet is headed toward enabling and facilitating where these lines are blurred to enhance the consumer shopping experience, delivering on engagement and relationship aspects.”