When I was 15 or 16 I needed my mom to create a PayPal account using her credit card, so I could bid on something on eBay. Like many parents her age at the time, my mom held an unwavering fear of using her credit card online, likely fuelled by pre-2004 horror stories of people being duped into releasing their information to online scams.
Nearly ten years later those fears have completely diminished for the average consumer, regardless of age. We’re in the age of mobile commerce and today two Canadian companies have bridged the gap between online and offline payment for merchants.
Shopify may have release iPad POS stand for its online customers seeking to sell their product in-store, but PayPal Canada isn’t far behind.
Along with Shopify’s announcement this morning, PayPal Canada announced an agreement with restaurant technology provider TouchBistro to allow customers to use their smartphone to check-in and pay with PayPal at cafés and restaurants at the POS.
The two competitors are both unveiling products in a space they envision to take off, one that hasn’t been taken advantage of by online retail solution providers. Why only offer merchants online stores when Shopify and PayPal can allow those stores to streamline operations?
Shopify is targeting its 65,000 merchants, as about one third of them also operate brick-and-mortar locations. It’ll cost merchants an additional $49 per month, while the hardware costs range from $19 for a credit-card reader to $499 for the whole nine yards. That includes a cash drawer, a bar code scanner, a receipt printer and aforementioned credit card reader.
“…the future of retail isn’t online versus in-store, it’s a seamless combination of both. Shopify has transitioned from simply powering online sales to powering all commerce: online, offline, mobile, and everything in between,” said Adam McNamara, Shopify's vice president of product.
Shopify appears ready to initially bring in higher revenues from its offerings than PayPal. But PayPal may be the one who benefits most down the road.
PayPal is not only targeting a different clientele, but is executing a pilot program using TouchBistro for select restaurant locations in Toronto. TouchBistro provides a popular POS app used by over 1,000 restaurantss, cafes and food trucks. It is currently the top-grossing food and beverage app in 18 countries on the App Store. Using the PayPal mobile app, customers can check-in to these cafés or restaurants (even before they arrive) and pay using their PayPal account, where their name and profile picture shows up for cashiers.
They’ve even convinced popular startup coffee spot Jimmy’s Café, near Project RHINO, to accept PayPal mobile payments at their TouchBistro iPad POS. Unlike Shopify’s new offering, PayPal is betting on a hardware-independent approach.
"We're collaborating globally with existing POS providers so that businesses don't have to rip or install new hardware to deliver unique and useful mobile payment experiences for their customers,” said PayPal Canada’s .“We're thrilled to work with TouchBistro…for our five million active PayPal users in
Matthew Braga of the Financial Post wrote today that the iPad, which both Shopify and PayPal are using as the basis of their POS systems, “has quickly become a point-of-sale industry mainstay amongst hospitality and retail clients.”
While traditional debit and credit terminals offered by banks offer scant analytical insight, the iPad systems promise more comprehensive options for “measuring sales analytics, maintaining customer databases, managing inventory and processing non-traditional forms of payment (such as devices using near-field communication or digital wallets).”
Braga wrote that the two companies are certainly targeting different audiences: Shopify is targeting its merchant customers who are already using its services, while PayPal is going after individual consumers.
We’ll be sure to keep an eye on both these companies over the next six months as time will tell who ends up ahead of the other.