PayPal plans to acquire Paydiant in a bid to grow as a payment option in brick and mortar retailers. The acquisition is expected to be around $280 million, according to multiple sources. The acquisition will occur either this month or next month, according to insiders. This is the most recent attempt by PayPal to grow its business outside of online transactions. However, previous attempts to make headway in brick and mortar payments have met with little success.
Paydiant is a startup which licenses its platform to retailers, so they can add payment options to their apps and allow users to complete transactions using their mobile devices. Paydiant's customers include MCX, a consortium of retailers which includes Walmart, Target and Best Buy. This platform, which is already widely used by retailers, could be PayPal's ticket into the brick and mortar business.
Paydiant is in direct competition with Apple Pay, Google Wallet, and the recently announced Samsung Pay, which also offer services to make payments from mobile devices. Apple Pay offers many payment features, such as the ability to swipe a phone as you would a credit card to make payments, in certain locations.
Apple Pay saw a fair bit of usage in stores across America since it was launched in October of last year, but it was quickly discontinued in CVS and Rite Aid stores, both of which are members of MCX. MCX said one of its main concerns is to let stores offer payment methods which include store branded cards. Right now Apple Pay only allows payments using debit and credit cards, which are more expensive for retailers to process.
PayPal believes that many retailers will prefer to create their own apps to make payments without be forced to use apps from big tech companies like Apple and Google. This is exactly what Paydiant offers, a way to easily incorporate payment methods into their own apps. They can offer exactly the payment options they want and customize the app to their own needs.
Do you think this acquisition is a good move by PayPal? How do you think it will benefit them? Leave your comments below.
