PayPal to expand digital wallet and coupon services with acquisition

PayPal has acquired mobile payment company Paydiant in an effort to expand its breadth of mobile solutions for retailers. Although terms of the deal have not officially been disclosed, a report from Re/code indicated that the acquisition will cost PayPal up to $280 million. 

The acquisition comes a little over a year after Braintree was acquired by PayPal. With PayPal's support, Braintree continues to see rapid growth. In fact, its authorized payment volume in 2014 was $22.8 billion, more than doubling from 2013. 

With the addition of Paydient to its portfolio, PayPal believes it will become an even stronger business partner for merchants. Paydient's mobile payment technologies have helped companies like Subway, Capital One and Harris Teeter build mobile payments, offers and loyalties into their own mobile applications. They also provide the mobile wallet platform for MCX whose members include many of the world's largest retailers including Walmart, Target, Sears, Wendy's, Exxon, CVS and more. 

The acquisition is subject to customary closing conditions including regulatory approvals, and is expected to close in late March or April 2015. As per the transaction, all of Paydient's 70 employees will join the PayPal team. 

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PayPal and EBay Chart Separate Paths into the Future

EBay will spin off its PayPal business into a separate publicly traded company in 2015.

Retweet (WSJ) - EBay Inc. said today it plans to spin off its PayPal electronic-payments business into a separate publicly traded company next year, acceding to the wishes of activist investor Carl Icahn who had pushed for the company to split.

The decision marks a sharp reversal for a company that spent a lot of time and money earlier this year fighting Mr. Icahn and the premise that eBay would be better divided. Now, eBay is employing many of the same arguments Mr. Icahn made in urging the split, saying, for example, that it would enable management to better focus on emerging challenges and opportunities and free PayPal to more easily reach agreements with companies that compete with eBay's online marketplace.

The payments landscape is changing rapidly, and Apple Inc. unveiled this month a new mobile-payment service it hopes will shake up the industry further. Also changing is eBay's leadership as Chief Executive John Donahoe steps down as CEO.

Mr. Schulman is a former Sprint Nextel executive and chief executive of Priceline.com, the discount travel website. He joined American Express in 2010 to lead the company's expansion into alternative forms of payment. There, he headed a new unit called the Enterprise Growth Group, which invested in companies focused on serving digital commerce.

Investors appeared to approve of news of the split, as shares of eBay jumped 7.4% to $56.57 in midday trading Tuesday, giving it a market value of about $65 billion. Gene Munster, a Piper Jaffray analyst, estimated the combined value of the PayPal and eBay is $62 per share.

PayPal has been on pace to overtake eBay's core marketplace by sales. In the June quarter, the payments unit boosted sales 20% to $1.95 billion and added 4.1 million new active customers from the first quarter, to 152.5 million. PayPal facilitates one in every six dollars spent online, eBay said. At its namesake marketplace, revenue rose 9% to $2.17 billion as the number of active accounts increased by 3.8 million to 148.9 million.

EBay bought PayPal in 2002 for $1.4 billion in stock. After the spinoff, PayPal and eBay will continue working together, the company said, with Robert Swan, eBay's finance chief, adding that both will have strong balance sheets. EBay plans to hold on to its current $7.5 billion in debt.

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PayPal Survey Shows 56% of Canadians Prefer Digital Wallet

MAJORITY OF CANADIANS COMFORTABLE WITH CASHLESS FUTURE

New market research conducted on behalf of PayPal Canada by Léger Marketing shows that 56% of Canadians are comfortable with never having to handle cash to make a purchase and many would prefer the use of a digital wallet to give money to others or pay for items when shopping. Given the choice, 34% of survey respondents would rather carry a mobile phone to make a payment than a pocket full of change.

The survey also indicates that 36% of Canadians would make mobile payments for a wide variety of purchases, on average, saying they would use their mobile device to buy something as expensive as an iPod ($272.30) or as inexpensive as a latte ($5.50).

Almost 40% of survey respondents said using a mobile phone to make a payment would be more convenient because they can make transactions whenever and wherever they want, and 60% of respondents would find it appealing to not have to find a bank machine every time they need to pay someone back.