This acquisition has been announced as the competition from Google and Apple continues to rise.
The PayPal unit at eBay has now announced that they will be purchasing the mobile payments company, Paydiant, as it works to enhance its strength in the market while competition continues to grow in the in-store environment, particularly from large players such as Google and Apple.
The deal will provide PayPal with immediate access to the businesses who are already using Paydiant tech.
Those businesses include a large number of customers ranging from Subway to the Merchant Consumer Exchange (MCX) consortium that includes many different large retailers such as Sears Holding Corp., Target Corp., and Walmart Stores Inc. The MCX companies have been working on their own mobile payments system called CurrentC, but that hasn’t yet moved past the pilot phase of testing and it has not yet moved on to a full rollout.
Paydiant is based in Massachusetts and provides back end mobile payments app technology.
That tech makes it possible for in store transactions to be completed using mobile devices such as smartphones. It uses QR codes at the checkout counter to allow the payments to be completed through a scan. This is a transaction system that requires one extra step over that of Apple Pay, which uses NFC technology. The extra step that is required for the Paydiant system is to actually turn on the phone and use it for barcode scanning. That has caused adoption to be slower for it than the contactless system from Apple.
Bill Ready, the head of the PayPal merchant business, explained that this acquisition gives his company the opportunity to broaden its service to offer more to its 155 million active users. At the time of the writing of this article, the purchase price that PayPal is paying for Paydient had not yet been disclosed.
According to Ready, “We want to enable payments any way people want to make them.” He has been with the company since it purchased Braintree for $800 million. This move is meant to boost the mobile payments business of the company, which will be very important when it breaks away from eBay later in 2015 in order to become publicly traded, at which point it will be facing Google and Apple as competitors, head-on.