June 30th, 2011

PayPal reaches 100 mil­lion act­ive users

Digital pay­ments com­pany PayPal — owned by ebay — now has 100 mil­lion act­ive users as the com­pet­i­tion in mobile pay­ments grows more intense.

PayPal has made mobile trans­ac­tions a pri­or­ity and is now pro­cessing up to $10 mil­lion in mobile trans­ac­tions a day. It expects this growth to accel­er­ate and has recently doubled its estim­ate of the total value of mobile pay­ments its expects to pro­cess this year from $1.5 bil­lion to $3 billion.

PayPal now has eight mil­lion cus­tom­ers who reg­u­larly make pay­ments using their mobile phone. Laura Cham­bers, Senior Dir­ector, PayPal Mobile

In total PayPal pro­cessed 28% more trans­ac­tions by value in the first quarter of 2011 com­pared to the same quarter in 2011 at $27.4 bil­lion. Their rev­enue con­tri­bu­tion to par­ent com­pany eBay grew 23% year on year to $992 million.

How­ever, there are a num­ber of com­pan­ies racing to get into mobile pay­ments includ­ing Google, the Wall Street banks, long estab­lished pay­ment com­pan­ies like Visa, and well-​funded star­tups like Twit­ter co-​founder Jack Dorsey’s Square.

Google recently launched its Wal­let pay­ment sys­tem based on Near Field Com­mu­nic­a­tions (NFC) tech­no­logy. Once the infra­struc­ture is in place and com­pat­ible phones are avail­able, Google Wal­let users will be able to make secure, point-​of-​sale pur­chases by wav­ing their phones at a NFC reader at the retailers’check-out.

PayPal doesn’t have an NFC ver­sion so far, but recently pur­chased a star­tup called Fig Card which allows users to make point-​of-​sale pur­chases via a WiFi con­nec­tion. Square, the star­tup foun­ded by Twit­ter co-​founder Dorsey, also helps mer­chants receive mobile pay­ments through its Reader product.

Twit­ter co-​founder Jack Dorsey’s Square announced this week that it has raised $100 mil­lion in a third round of fund­ing, which now val­ues the dongle-​based pay­ment star­tup at $1 billion.

It is thought that this brings the total amount inves­ted in the com­pany to approx­im­ately $130 mil­lion. In April, Visa made an undis­closed invest­ment in the company.

Square, accord­ing to the WSJ, is now pro­cessing $4 mil­lion in trans­ac­tions per day via Android and Apple mobile devices using an attached dongle and an installed app to make secure pay­ments at point of sale.

Apple is also rumoured to be con­sid­er­ing includ­ing NFC in a future ver­sion of iOS, its iPhone and iPad oper­at­ing system.

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