Paypal to swipe real-world store payments

Mar 14, 2012

Jeremy Hobson: The world’s largest online payments business, Paypal, is expected to announce tomorrow that it’s getting into a new business, allowing anyone to send and receive debit or credit card payments via smartphone.

Sabri Ben-Achour reports.

Sabri Ben-Achour: At craft shows around Washington D.C., Meg Murray sells, well…

Ben-Achour: Uh, what are these things?
Meg Murray: They’re little ceramic monsters, and animals and mythical beasts.
Ben-Achour: I see you have a monster riding a pie.

She doesn’t sell these figurines using a cash register — she uses her smartphone.

Murray: I’ll take your card and I’ll just swipe it really quick.
Ben-Achour: That’s really easy.
Murray: Yes it is!

The company that makes that possible is called Square, and in just one year, it’s developed a loyal following among a million merchants and processed $4 billion in payments. Now Paypal, known for online payments, now wants a piece of that real-world action.

Scott Kessler: Kind of like going back to the future.

Scott Kessler is an Internet equity analyst at S&P Capital IQ. He says while Paypal is a huge player, it does face a challenge moving from the digital world to the real one.

Kessler: Oftentimes, it is very difficult for let’s say digital technology companies to shift to somewhat separate markets.

One thing is clear though: At the end of the day, you’ll have one more way to spend your money.

I’m Sabri Ben-Achour for Marketplace.

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