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DIGGING INTO WHY PAYPAL IS PARTNERING WITH SAMSUNG. PayPal has recently partnered with Samsung in two ways:
- As we recently reported, PayPal's app, which allows users to make payments online and in physical stores, will be the first payments app included on Apple competitor Samsung's Galaxy Gear 2 smartwatch.
- Users of PayPal on the Galaxy S5 smartphone will be able to use fingerprint authentication to make payments via the app — no password necessary.
The partnership with Samsung is a good strategy for the payments company as a means to make their services as widely available as possible. But we believe there's another reason PayPal is tightening their relationship with the mobile device manufacturer now. And it has to do with Apple.
As we've covered, Apple is positioned particularly well for getting into payments. Through iTunes and the Apple App Store, the company has a huge number of account holders with credit cards on file with the company, and also offers other payment-related services such as Passbook.
Many have speculated that Apple will soon make a move into payments.
That thought likely has PayPal worried.
If Apple got into payments it could easily take market share from PayPal and could conceivably even ban the PayPal app from the App Store. Those are big "ifs" but they matter from a strategic perspective.
We believe that while so far PayPal and Apple aren't directly competing with one and other, it makes sense that PayPal would want to partner with Apple's biggest competitor in case things change.
The mobile payments space is all about gaining a critical mass of users; if a lot of people use a particular payment method then that visibility will cause more people to join, the payment method will be widely accepted, and eventually it will become ubiquitous.
If Samsung takes market share from Apple, PayPal will be better positioned as a mobile payments platform to gain payments market share. The bottom line is that if PayPal and Apple end up competing in the payments space, PayPal has made a strong ally in Samsung.
FIRST LOOK AT THE COST OF TARGET'S DATA BREACH. Target announced year-end earnings yesterday and with the announcement came some key data points on just what the data breach cost the retailer. Target's U.S. same store sales fell 5.5% for the quarter — the worst showing in two years. In addition, Target has already paid out $61 million in costs associated with the breach, though $44 million was covered by insurance. The data breach exposed the credit and debit card information of 40 million people, in addition to exposing the personal information of 70 million people. Target reported the data breach less than a week before Christmas — a key selling period for retailers. (Wall Street Journal)
SQUARE WILL LET YOU ORDER FOOD FROM ITS NEW APP. One of the biggest stories we are going to see in the coming years is a blending of e-commerce, mobile commerce, and payments. Square is aiming to be a big part of this story. The company is reportedly testing a new app called Square Pickup. The app will allow restaurants to upload their menus to the app and customers to make orders from those menus for pickup via the app. Square already has a unique advantage over other order-ahead services like OrderAhead or Seamless because many merchants already use Square's hardware and technology to accept payment cards, so information like restaurants' menus is already built in; the new app is complementary to Square's payments business. (Business Insider)
Square also just acquired an online appointment management service. San Francisco-based BookFresh is a simple appointment booking service for local businesses. For example, you could use the app to set up a manicure at a local nail salon. In a blog post yesterday, Square announced that it had acquired BookFresh though the terms of the deal were not disclosed. (Square)
REVEL AND INDEX PARTNER. San Francisco-based Revel Systems, which uses the iPad as a point-of-sale terminal, announced yesterday that it partnered with Index, which provides merchants with technology for analytics and loyalty programs. The partnership provides retailers with the opportunity to accept mobile payments using their iPad and to track and upsell customers with offers and loyalty programs. For an insider's view of Index, check out our recent company profile on BI Intelligence. (Finextra via Revel)
FINANCIAL SERVICE COMPANIES ARE DEVELOPING APPS FOR GOOGLE GLASS. A common theme we expect to see over the next year is financial services companies developing apps in order to make the personal banking experience relevant to the consumer. What we haven't talked about is how financial service firms are developing apps for Google Glass, mainly because Google Glass hasn't been released and apps are still in the development stage. However, a blog post from Corporate Insight provides some clues on what firms with early access to Google Glass have in the works.
Here is a rundown:
- Fidelity is working on an app that will generate a stock quote when a Glass wearer focuses on a company's logo.
- Discover's app allows users to see their recent transactions and receive push notifications.
- Wells Fargo's app allows account holders to monitor their cash flow. (Corporate Insight)
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