During this latest recession, saving money on everything from eating out to mani-pedis has become chic. The newest social couponing player’s plans are detailed in Bloomberg’s “EBay’s PayPal Bets on 103 Million Users to Target Groupon: Tech.” The company will offer coupons tailored to users’ buying habits and mobile-phone locations.
“PayPal is also seeking to use mobile deals to get a head start in wireless payments, as credit-card companies collaborate to create a standard using near-field communication technology.” “The coupons are supposed to keep customers using EBay beyond the payment process, with the goal of helping the Internet’s largest online marketplace to widen its user base.” “As part of the larger push into wireless payments, PayPal will offer a so-called mobile wallet — usable through phone applications or a PayPal card, or even a name and personal- identification number — that holds a consumer’s information from credit and debit cards from multiple providers.”
Consumer behavior drives this market. Groupon and LivingSocial had an estimated combined 73% market share in daily deals in October 2011 with local efforts having some success. While PayPal may steal some of that, will it be able to siphon off enough? Facebook couldn’t and exited the field. A lack of consumer loyalty and increasing coupon competition have merchants tiring of the trend. And while you’ll always have penny-pinchers, how long before consumers experience overload and become immune to daily deals?
Jim Daniels, December 29, 2011