NEW YORK – On Thursday, Paypal released the latest update to their mobile application aimed to make restaurant ordering and payment more convenient. The new features include the ability to order in advance and to pay while you are still at the restaurant table. The move comes as the subsidiary of eBay (NASDAQ:EBAY) attempts to expand its reach beyond processing payments for online orders into brick-and-mortar retailers.
Also included in the updated app is a feature called ‘Shop,’ which allows users to connect PayPal merchants nearby. According to Denée from Forrester Research, the update represents the next step in evolution of mobile payment systems. However, there is app is trying to create a need where one might not be, ‘people are not struggling with paying, what’s needed is a smarter and more convenient commerce experience before, during and after the moment of payment’ and that is what this release has attempted to achieve.
While other mobile payment systems have failed to take off, the potential success of this update might prompt companies such as Groupon (NASDAQ:GRPN) and Square to follow suit. As features such as location alerts (which will allow nearby retailers to forward coupons) and the ability to set up financing through PayPal’s ‘Bill Me Later’ service are likely to be replicated.
A recent report from Forrester estimates that nearly $ 90 billion per year will be spent through mobile payment systems in the U.S. by 2016. If so, the race to become the leader in the space is likely to intensify as tech companies, credit card companies, and banks will be searching market share.
Carrington believes that ‘no one has an inroad to the merchant community the way PayPal does,’ and she might be right as the company has already established relationships with Jamba (NASDAQ:JMBA) and McDonald’s (NYSE:MCD). Furthermore, PayPal’s system does not require the extra step of entering payment information.
Furthermore, as early rumors that Apple’s (NASDAQ:AAPL) latest iPhone WILL NOT have a Near Field Communication (NFC) chip will play to PayPal’s advantages as the move would reduce the momentum of NFC technology in favor or applications, where PayPal has a clear lead – for now.