PayPal Acquires Paydiant, Reasserts Itself in In-Store Mobile Payments
March 5, 2015
The mobile wallet dominoes continued to fall this week as another major player scooped up a startup that will enhance its in-store mobile offering. PayPal acquired Wellesley, Mass.-based mobile payments provider Paydiant. While the companies did not disclose the terms of the agreement, various reports put the purchase price between $280 and $300 million.
Recent shakeups at PayPal led to industry speculation the company was pulling back from its efforts to provide an in-store mobile payment solution. The acquisition of Paydiant, which provides white-label mobile solutions at the POS for companies like Walmart and Subway, could be a sign that speculation was premature.
“While Paydiant may not be a name you recognize, if you like to pay with mobile apps, you are likely to be very familiar with the technology they’ve built,” said Dan Schulman, president and incoming CEO of PayPal. “Using Paydiant’s platform, our merchant partners can now create their own branded wallets to accelerate mobile-in-store payments and drive consumer engagement through mobile payments, loyalty, offers and the prioritization of preferred payment types, such as store branded credit cards and gift cards. Similar to PayPal, Paydiant’s technology-agnostic approach means that merchants can use any mobile payment technology—QR codes or NFC—that best suits their business.”
Since Apple entered the fray with Apple Pay in September, the PayPal announcement makes three major competitors that have announced acquisitions that will bolster their ability to offer mobile payments at the POS. Two weeks ago, device-maker Samsung nabbed Loop Pay and last week, Google announced it had acquired the technology of carrier-backed joint venture Softcard. Aside from Apple, a PayPal/Paydiant combination is the only one that enables card-not-present m-commerce payments in addition to contactless payment at the POS.
One uncertainty moving forward is the status of Paydiant’s partnership with another major mobile payments initiative: MCX. The merchant-backed solution launched with great fanfare more than two years ago and began pilot tests last September.