PayPal Partners with Discover

PayPal has lined up the biggest partnership to date for its in-store payment campaign with credit card company Discover.  The deal will ultimately bring PayPal payments to seven million merchant locations in the U.S.  Under the partnership, PayPal will utilize Discover’s credit card network to enable PayPal users to make payments at retail stores starting in April of 2013.

Discover is integrating PayPal’s payment system into its software, which will be uploaded to point-of-sale terminals that support Discover Card payments.  PayPal’s branding and rules will be presented to consumers who choose to pay in store with PayPal.  PayPal currently has more than 50 million U.S. customers who will be able to take advantage of in-store payments.

At launch next year, PayPal users will be able to pay with a PayPal Access Card, which connects to a PayPal account and can be funded from a bank account or credit card.  Users will be able to use the card in conjunction with a PayPal mobile wallet app, which will deliver e-receipts, offers and other services. 

PayPal has said that this year is still a testing and experimenting year for in-store payments and the real work will begin next year.  But with deals like the one with Discover, it’s really showing that it wants to go big and really compete in the market for mobile and in-store payments.  Getting acceptance at seven million locations is going to really help PayPal because they can soon tout how many locations they are in.  That’s important for consumers, who will want a mobile payment system that is widely accepted in the areas they shop. 

How to Prevent Showrooming

Showrooming is a term used for when consumers browse items at a brick-and-mortar store and then compare prices online.  With the ever increasing usage of smart phones, consumers are utilizing comparison shopping apps to search for the best price.  Unless brick-and-mortar retailers can compete with online prices for the same product, they will lose the sale.  This trend of savvy consumers’ use of traditional retailers as their showroom to touch and feel a product is only going to increase.  So how does a brick-and-mortar store prevent itself from becoming the showroom for their customers?

First, a brick-and-mortar store has to be competitive on pricing.  If the price from an online retailer is a lot lower for the same product, most consumers will choose to buy from an online retailer.  Although price is arguably the most important factor whether a consumer purchases an item from a store retailer over an online store, other factors can persuade a consumer to make the purchase from a store. 

One example is merchandising.  The location and decoration of a display can create an atmosphere of buying that online retailers cannot do.  Signage, product information and lighting can have a great impact.  Another thing that online retailers cannot offer is the touch, feel and taste of a product.  Sampling of products allows consumers to try a product before they buy it.  Having associates not only offer the product, but talk about the product with the customer, is a great way to create a buying decision.  Sampling also takes away consumers’ fear of buying something new for the first time and not knowing if they will like it.  Lastly, good face-to-face customer service is something online retailers cannot offer.  Friendly associates who are helpful to shoppers create customer loyalty in the store.  Online retailers compete mostly on price only.  When done right, human touch is one advantage that brick-and-mortar stores have over any digital store.