Digital payments pioneer PayPal aims to amp up its checkout technology as it beats back more competition in that arena and revamps its approach to engaging users.

In speaking to an investor conference last week, PayPal CEO Dan Schulman said the company aims to reduce the time it takes for merchants to take customers through a transaction; to eliminate its reliance on passwords; and to draw more consumers to its buy now, pay later services, among other moves.

“One of the key things we’ve been working on for a long time is checkout,” Schulman said June 9 in response to questions from Bank of America analyst Jason Kupferberg on a webcast of the conference. “There are a lot of things we can do better in checkout that we’re quite focused on.”

San Jose, California-based PayPal, founded in 1998, is the legacy giant in the checkout arena. More recently other startups are jumping into the ring with newer technologies in an attempt to provide consumers with the ultimate “one-click” checkout experience. Schulman specifically mentioned startup Bolt as he was making comparisons to the competition. Another rival, Fast, recently shuttered in the face of competition and increasingly difficult recent economic conditions.

PayPal has about 35 million merchant customers and nearly 400 million consumer accounts that use its checkout technology, Schulman said, noting that consumers choose PayPal about 60% of the time when it’s an option. He contended the next biggest player in the industry attracts just 8% of consumers.

That rising competition is the context for Schulman seeking to soup up his company’s services. PayPal said earlier this year that it has reduced its goals for acquiring new user accounts in a bid to improve engagement with existing customers. The company has also been revamping its operations with employee cuts around its system, reportedly including in California and Ireland

All of that PayPal restructuring comes as the company searches for a new chief financial officer, after the company announced in April that John Rainey would leave at the end of May to join retail giant Walmart. Last week, Schulman said he met with all of his vice presidents from around the world to discuss the business. He plans to test and roll out new checkout upgrades this year as the company refines that experience.

Schulman noted that the consumer experience of bouncing in and out of the PayPal application isn’t positive and needs to change. That lack of seamlessness results from legacy technology, he said. The company is working with each merchant, starting with the 100 biggest, to reduce that impact, Schulman said.

“Uptime and availability” of the service is key and that means reducing the time in which transactions can be can conducted, reducing the so-called “latency” of transaction time, Schulman said.

“When you have as large a base as we do, any reduction in latency leads to incremental improvement in checkout, and I think we can cut off several seconds this year alone in our checkout,” the CEO said.

In addition, all too often users forget their passwords, even though the company uses a host of other ways to identify them. So PayPal wants to move away from passwords, as are other companies. “We are going toward passwordless login so people don’t need to worry about their user name and password to do a one-click checkout,” he said.

PayPal will also test ways to help merchants better use PayPal’s archived consumer data this year, so they can tailor the checkout experience to individual consumers, Schulman said.

Currently, more merchants are making PayPal’s buy now, pay later financing available to consumers before the checkout step, and Schulman believes it can increase the number of merchants making that move. 

“When people use buy now, pay later, 200,000 merchants have already moved us upstream on their product pages, as opposed to checkout and there’s a lot more we can do to move upstream,” he said.

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