PayPal ups digital wallet competition with revamped service

"Imagining the future of money"

PayPal is broadening its digital wallet service to allow consumers to carry out a range of complex financial transactions as it seeks to stamp its authority on the increasingly competitive market. Speaking at SXSW in Texas, VP Sam Shrauger claims that the updated wallet will “let consumers do things with their money that have never been possible before“, such as taking an item home to trial before paying for it – essentially allowing them to change their minds before buying. The changes see PayPal offering a huge, if complex, degree of flexibility, with the firm stating that it is “imagining the future of money“. Along with delayed payments, consumers can pay for items in instalments or even pay for items using different “sources of value” beyond credit cards such as mixing gift cards, airline miles and loyalty points.

PayPal’s wallet is digital – not just mobile, digital – it lets consumers do things with their money that have never been possible before,” says Shrauger, explaining the changes  in a blog post. “And there’s no finite set of features, because the digital wallet can evolve with the pace of innovation, allowing us to incorporate new functionality as consumer demands shift.

PayPal is also making a move into deals, with its updated wallet allowing users to organise their personal finances and set up personal wish lists of desired items, with the service able to alert them if these are ever discounted. Users can also tie specific credit cards or other funding sources to specific merchants and designate funding sources for specific purposes, such as assigning one bank account for all entertainment-related purchases.

The move sees PayPal throwing the gauntlet down to Google, which launched its Google Wallet service in September last year, in what is increasingly regarded as an ill-considered move. The service is beset by security problems and was forced to prevent new users signing up earlier this month in a bid to halt the usage of stolen cards.

The issues indicate that while the digital wallet space is heating up, the balances are tipped in PayPal’s favour. Already the most trusted mobile payments provider, the firm rolled out in-store payments in the US last week. This, plus an innovative digital wallet, sees PayPal bringing its brand to a number of different payment services in a bid to remain uppermost in consumers’ minds in a sector that could be worth USD67.5bn in the US by the end of the year.

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