PayPal forecasts mobile payments to reach $3B in 2011
PayPal anticipates its 2011 mobile total payments volume will reach $3 billion, up from the $2 billion target the company forecasted in February.
"This is the third time we've had to update our mobile 2011 projections," writes PayPal Mobile senior director Laura Chambers on the PayPal Blog. "We first predicted $1.5 billion in 2011 mobile payments volume."
PayPal now processes $10 million in mobile total payments volume each day, up from $6 million in March. Chambers told The Wall Street Journal that the volume of mobile payments can be broken down into two categories: Person-to-person money transfers and m-commerce purchases. While she declined to specify how much each category contributes to PayPal's overall mobile usage, she did state that 8 million PayPal customers regularly make purchases via mobile phone, up from 6 million earlier this year.
Earlier this year, digital marketplace eBay (which acquired PayPal for $1.5 billion in late 2002) said its mobile payments service grew 23 percent during the first quarter to $992 million, almost 40 percent of its total revenue. In addition, eBay CEO John Donahue said PayPal is on pace to emerge as the company's biggest business within the next few years.
PayPal will face mounting competition in the months ahead: Earlier this week, Isis--the mobile commerce joint venture spearheaded by Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA--identified Austin, Texas, as its second launch market behind Salt Lake City. Isis will begin Near Field Communications-based contactless payment trials in the first half of 2012.
PayPal also must contend with the new Google (NASDAQ:GOOG) Wallet, which aligns Google with U.S. network partner Sprint (NYSE:S) and financial services providers MasterCard, Citi and First Data to enable subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones. Hours after Google unveiled the mobile payment solution, PayPal filed suit claiming the web services giant misappropriated "trade secrets" when it hired away PayPal mobile executives.
- read this PayPal Blog entry
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