December 21, 2010, 10:49 AM

PayPal mobile payments rise 300% over the holidays

PayPal predicts $700 million in mobile payments for 2010, up from $141 million last year.

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PayPal, the payments unit of online marketplace eBay Inc., says its mobile payment volume rose 300% between Nov. 15 and Dec. 15 compared with the same period last year. For Dec. 18-19, mobile payments rose 279% compared with the period in 2009, PayPal says. And PayPal reports mobile payments rose 310% the day after Thanksgiving, also known as Black Friday, compared with Black Friday 2009.

Those figures put PayPal on track to reach $700 million in mobile payment volume for 2010, up from $141 million last year. That figure would top PayPal’s parent eBay’s total mobile sales of $600 million for last year, although eBay projects mobile sales volume of $1.5 billion in 2010.

Mobile has treated eBay well over the holiday season. Last week, eBay declared Sunday, Dec. 12, its biggest mobile sales day ever. The online marketplace reached $5 million in mobile sales on that day, up 127% from the same Sunday last year. Worldwide, mobile sales reached $13 million, up 165% compared to last year.

Sunday’s mobile sales also beat eBay’s mobile sales on Cyber Monday, the Monday after Thanksgiving, a day when many shoppers turn to the web to buy online after returning to work. EBay’s U.S. mobile sales of $5 million on Sunday were 38% higher than Cyber Monday’s $3.62 million, eBay says.

In October, PayPal launched Mobile Express Checkout, a version of its Express Checkout system already available to e-retailers. With it, consumers are able to complete purchases on merchants’ mobile sites using their PayPal accounts. By accessing stored PayPal information, consumers can check out more quickly on mobile sites than if they had to type in full billing and shipping information.

"We see the jump in our mobile transaction volume over the holidays as an indication of increased smartphone adoption and increased demand from savvy consumers who want a reliable and safe mobile shopping and buying experience," says Bill Zielke, senior director of Merchant Services at PayPal. "Our recently launched Mobile Express Checkout allows merchants to deliver a simple and safe buying experience to mobile customers and, as a result, we've been able to help our merchants sell more during the holiday season."

Zielke thinks now that consumers are getting more acquainted with mobile commerce, they will start partaking in other mobile shopping activities and technologies. "Mobile is undoubtedly where consumers are moving in commerce generally - not just e-commerce," he says. "I think next year we'll see consumers really start embracing things like augmented reality apps, digital payments at the point of sale and location-based deals that will bridge the gap between offline and online commerce."

Augmented reality uses the capabilities of a mobile phone to enhance a photographic presentation.

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