PayPal said in March that it planned to double revenues in two years, growing from $2.4bn to $5bn by 2011. It was an audacious goal, but today PayPal gave some indication of how it hopes to achieve as much.
With the official introduction of its platform on Thursday, PayPal invited third-party developers to tap into the PayPal experience and weave it into their own applications and websites. Called Adaptive Payments, the platform should expand PayPal’s reach, bringing it to iPhone, Facebook and Twitter applications, and perhaps into the physical retail world.
“It’s going to unleash a ton of innovation for developers and entrepreneurs who have concepts that involve money being exchanged,” PayPal president Scott Thompson said in an interview. “When you don’t have to worry about how you’re going to get paid, you can focus on creating a great product.”
Introducing the Adaptive Payments platform may be part of PayPal’s growth strategy, but it’s also a defensive move. Google and Amazon have both introduced payment systems in recent years, and while neither has taken off, Amazon’s Flexible Payments System does offer APIs for developers to work with. At the same time, smaller payments companies have sprung up to handle mobile transactions and micropayments. PayPal has all but ignored these areas until now, but Adaptive Payments should let it get a piece of these growing markets.
The initial focus will be on integrating PayPal into a wider array of online applications. But a promotional video shown by PayPal (below), gave hints of the company’s broader ambitions. In it, chic consumers of the not-too-distant future are seen using PayPal to purchase everything from groceries in the supermarket to beers after work.
Such a transformation will not happen overnight. An entirely new payments infrastructure will be needed to complement, or perhaps replace, the credit card terminal before PayPal is truly ubiquitous. But it’s a transformation PayPal clearly believes is underway, and one that could pose a major threat to the dominant credit card companies.
When asked, Mr Thompson wouldn’t articulate just how much of a presence he hoped PayPal might have in the physical retail world. But what he lacked in specificity he made up for in ambition. “We want PayPal to be everywhere,” he said.
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