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The PayPal brand has become synonymous with 'online payments', and despite the fact that the company isn't the newest kid on the block, it's no surprise that it keeps growing like a weed as  commerce continues to move online.

John Donahoe, the CEO of PayPal parent eBay, however, thinks that online payments should make up a much greater percentage of global payments than they currently do and as a result, PayPal is aggressively working to expand its footprint. One of the newest ways PayPal appears to be doing that is through a new offering called Access, which is reportedly set to be announced today at its X.commerce conference.

According to BusinessWeek, PayPal Access will "[let] people use their accounts in different Web stores without having to register at each one." The details:

"You can create an account wherever you’re shopping without giving the merchant your information," [a PayPal spokesman] said in an interview. By relying on PayPal developers to handle the innovation, Web retailers can make their sites easier and more functional without doing it themselves, he said. "These retailers don’t have the time and resources necessary to figure it all out."

As reported by Reuters, retailers using PayPal Access will only receive a customer's shipping address; PayPal will keep the rest of the customer's information to itself. The logic: by eliminating the need for customers to complete a registration and provide personal information to a retailer, the retailer may see improved conversions.

That sounds nice, but currently PayPal apparently doesn't have much support, if any, from retailers. And if the statements made by PayPal's spokesman are any indication, it's hard to see where such support will come from.

PayPal Access, as described, may on the surface offer some possible benefits to consumers, but it's hard to see how putting a barrier between consumers and retailers will really benefit either in the long run. After all, few things matter less to retailers today than data. In offering a 'solution' that aims to circumvent retailers' normal registration process, PayPal is really keeping valuable data about customers out of retailers' hands. That data, of course, tells them who their customers are. Needless to say, knowing who their customers are is absolutely crucial for retailers. This enables everything from more relevant email marketing campaigns to the creation of a better, more personalized user experience.

When coupled with the notion that developers should "handle the innovation" for retailers because "retailers don’t have the time and resources necessary to figure it all out", it becomes clear that PayPal's assumptions about online retailers may be slightly off. Put simply, many online retailers are far more sophisticated than PayPal is willing to give them credit for.

If PayPal is going to boost the number of transactions it handles, and compete more effectively with credit cards, it's going to need to do better than this. Savvy online retailers are always looking for ways to strengthen their relationships with their customers. It's hard to see how a PayPal barrier between retailers and customers will promote that.

Patricio Robles

Published 12 October, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2407 more posts from this author

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Katie

It's a interesting point and I can see and empathise with the dilemma it presents, but I find it slightly odd that there is no mention anywhere of the customer. In the high street, the customer only sometimes gives additional personal data (and only by choice) to the retailer and is able to move from shop to shop using cash or payment card.

I would hazard a guess that whilst PayPal Access may be be unappealing for retailers hungry for more data, it may be quite appealing to consumers who a) find it bothersome to have to register with every online shop they buy from and b) may be increasingly concerned about the amount of personal data they are leaving around on the internet

almost 5 years ago

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adrian

Pay pal is like a drug. Having become dependant on her for so long I'm not sure we have the strength to break free into the real world. Oddly, I'm surprised we don't have merchants who recognise this and supply us with kits to de - ebay our websites!

almost 5 years ago

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Robbie

Isn't this just Paypal doing their version of Google checkout?
I agree with the statement that retailers are more sophisticated than Paypal give us credit for and that our closeness to our customers is key to our success. But this closeness has to be for the right reasons.

Finally - is it 'balanced' to describe Paypal's growth like a "weed"?

almost 5 years ago

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Dharm

paypal is fine..but their policy for US buyer protection is more than a seller..i have suffered a loss of 420 US$ ...bcoz i got payment from US buyer.. that person took the material..and then doesnt pay to his credit card company..which in turn put claims on paypal...and paypal unneccesary charged on us... in this way, i have suffered 800 US$..loss due to paypal...i called paypal people, they dont help me et all and ignored it by saying just email us... There is no seller protection even by paying them 3 or 4 % fees...so, paypal is not good for retailers

almost 5 years ago

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Kevin Reay, n/a

I agree with Katie, anything that makes ordering off our website easier for the customers and improve conversion rates will be welcomed by us.

Yes it will be harder to market without the additional details however the high street has been doing this for hundreds of years. We will just have to be more inventive on how we can capture customers details.

almost 5 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

I think a key point missed is the impact on mobile. I find it far easier and quicker to checkout on paypal enabled sites via mobile which makes me (personally, as a consumer) more likely to use those sites

Agree on Katie's point regarding the high street though I think this view doesn't take into account that online is a different medium and not setup to mimic the high street (which has its pros and cons)

Patricio I think the article does read slightly biased against Paypal - I'd say their growth has been more akin to a beanstalk than a weed.... reaching heights other payment providers haven't managed to reach (eg Google)

Bottom line for me is making the checkout simpler and quicker wins all day long however balancing retailer needs for data will certaintly become a very sticky point for larger retailers which then puts into question where paypal are aiming this at

almost 5 years ago

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Ankit

The following statement is wrong, "As reported by Reuters, retailers using PayPal Access will only receive a customer's shipping address; PayPal will keep the rest of the customer's information to itself. The logic: by eliminating the need for customers to complete a registration and provide personal information to a retailer, the retailer may see improved conversions."

I've posted an article about the Paypal Access and it actually sends Email, Phone and Address data to the Merchants.

Have a look here

http://ankitkumar.in/paypal-access-magento-go-and-conversion-rate/

Thanks
Ankit

over 4 years ago

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George Mathews

Payapl is truly an evil company. They can limit your account at any time and take your money.

One should never ever use paypal. chack sites like paypal sucks.com for a long list of complaints.

over 3 years ago

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