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PayPal's President Weighs in On Payments Disruptions Coming in 2013

David Marcus, PayPal's president, offered up his predictions for the innovations to come in the payments in 2013 yesterday on PayPal's blog.

PayPal's president David Marcus predicted big changes are coming to the payments industry in 2013 in a post on PayPal's blog yesterday. Marcus said that he expected to see the momentum of change and innovation in payments accelerate next year after a number of companies launched innovative payments initiatives this year.

In his post Marcus made four predictions on how that change and innovation will take form in the next year. He gave low marks to the chances that NFC will go anywhere. In fact he predicted that all the noise about NFC will slowly die in the next year. "Is tapping a phone on a terminal any easier than swiping a credit card? I don't think so," Marcus wrote. He also might not be so optimistic about NFC because it would compete with PayPal's cloud-based approach to digital wallets.

Payments will also merge with the loyalty and coupons business in 2013, Marcus said. "The digital wallet must offer more than another way to pay," he explained. "It should get out of your way and let you focus on the things you want most - points or rewards for example." These three businesses will have to converge to offer the customer something more than a payments method if digital wallets are to gain wider adoption, he said.

[See Related: Visa, PayPal Top Mobile Wallet Report]

Marcus also said that he expects big things in the area of mobile point-of-sale solutions, predicting that "the cash register will go mobile." Most transactions in stores are already transmitted over the internet on the back-end, Marcus noted, so it would seem a natural progression for the cash register to go mobile, allowing sales associates to come to the customer in the aisle to fill an order rather than the other way around.

Lastly, Marcus wrote that location-aware and context-driven shopping will begin to have a bigger impact on shopping, and customers' lives in general. We are just starting to see the emergence of solutions that make offers based on the customer's location or other personal data, Marcus said, citing Apple's Passbook as an example. Marcus seems to think that we're only scratching the surface of what can be done in this area.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

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Alex.Johnson
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Alex.Johnson,
User Rank: Apprentice
12/28/2012 | 10:21:38 PM
re: PayPal's President Weighs in On Payments Disruptions Coming in 2013
David Marcus makes several valid points. NFC is not currently offering
any great advantage to consumers. I agree that opening an app and
tapping a phone against a register is not significantly easier than
pulling a credit card out of a wallet and swiping it. The idea of a
"mobile wallet" is going to have to evolve to offer consumers more value
and less risk. Many consumers are worried about what will happen if
their phone dies or loses reception. What happens if their phone is
hacked? Currently, I see NFC-enabled mobile wallets actually creating
more problems than they solve.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
4/15/2013 | 4:03:54 PM
re: PayPal's President Weighs in On Payments Disruptions Coming in 2013
I think the success of NFC is dependent on if/when EMV adoption occurs. Once merchants make that switch to EMV they are almost ready to start taking NFC payments. But that's still several years away at best.
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