Credit card companies are doing it. Some banks are even doing it. Now eBay’s PayPal says: let’s also roll out some online targeted deals, too.
Indeed, Bloomberg reports today that PayPal is the latest company to jump into the raging daily deal provider party, widely known thanks to its leaders Groupon and LivingSocial. The company will offer targeted coupons to PayPal users based on their locations and transaction history. The service is expected to hit sometime during the first quarter of 2012.
PayPal moving into the couponing scene is just another perfect example underscoring how great the metamorphosis of payment provider’s values is. Indeed, the value of payments, in and of themselves,in the digital age is diminishing for credit card companies and other payment providers. Rather than the payment, the consumer data collected with the exchange of payment may be more key to the company’s revenue. Why? Highly targeted coupons may be the lynchpin to customer loyalty, and therefore, yield more sales.
To us, players — like PayPal — that know consumers’ transactions most intimately are best posed to capitalize on the targeted coupon market. But that still means there are a lot of likely candidates that can profit on the market. Bank Innovation has blogged on recent daily deal efforts here, here, here and here.
Still, we saw a sneak peak of PayPal’s budding digital wallet, which ties in loyalty and coupons into its product, in November and were certainly encouraged by what we saw. (Check out some photos of the pop-up shop that showecases the technology in New York here.)
The PayPal Wallet, to start officially rolling out in stages next year, makes physical wallets a moot point. Like other digital wallets, PayPal will house all payment forms in the mobile device, ranging from credit cards to gift cards to loyalty points, while consumers’ payment options include: swiping a physical PayPal Card at POS, entering a mobile phone number and a 4-digit pin, or tap and pay with NFC. What impressed me most from the Wallet features that I saw demo-ed was the ability for customers to create wish and buying lists and have the app alert them to when deals on their desired products are running. Say you have bread and eggs on your list. The app will shoot over offers and discounts from participating retailers when they are available. After sampling the digital wallet’s functionality, it only makes sense that PayPal would also dive into the daily deals scene: There’s money to be had from getting into the business.
At a recent payments conference, a Bank of America exec spoke to this savings trend, telling attendees that customers’ primary wants from their FIs also now include helping them save money while shopping.
“This wasn’t even on the radar 24 months ago,” said John Thomas, senior vice president for emerging and electronic payments at BofA, during a presentation. “We need to deliver solutions well beyond traditional banking. Customers are telling us we want you to go places you haven’t been.”