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.