PayPal Is Piloting A 'Wearable Wallet' For Smartwatches

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PAYPAL PILOT 'WEARABLE WALLET': PayPal is using the coffee shop located on its corporate campus to test a new payment method that uses beacons and wearable devices. The beacon detects when a customer enters the store, sending a push notification to the person's wearable device (PayPal is only using Samsung devices for the test). The customer can then use their wearable device - such as a smartwatch - to buy their coffee or redeem an offer. PayPal says it's a natural progression in beacon-enabled payments. (Mobile Commerce Daily)


QUOTE OF THE DAY: "The Wearable Wallet, in particular around smart watches, has some go-to-market advantages over the mobile phone. Because the devices are issued by a non-carrier, there shouldn't be the historical battles for access ... That should accelerate the usage and adoption since there are fewer intermediary hurdles to overcome when launching a product. For many mobile payment players, it was difficult to create a business model that worked if you were paying the carrier a portion of each transaction. The Wearable Wallet can remove at least one stakeholder from the business." - Drew Sievers, former CEO at mFoundry and now founding partner at Operative Capital.


FACEBOOK'S RELEVANCE TO E-COMMERCE: During Facebook's earnings call yesterday, chief operating office Sheryl Sandberg said online payments are not yet a major factor in the company's business. She said that Facebook is still relevant to e-commerce though, with or without a popular payments system, because brands can reach their customers through advertising - Facebook's bread and butter. Furthermore, research has shown that the world's largest social network does drive a significant amount of traffic to e-commerce sites, even if those shoppers don't necessarily buy something immediately upon visiting.

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ETSY ACQUIRES GRAND ST.: Etsy has acquired Grand St., an online marketplace for consumer electronics. Etsy says Grand St. will continue operating as a standalone marketplace, and will not merge with Etsy. The deal is seen as a way for Etsy to expand beyond handmade crafts, while still maintaining its rapport among individual sellers and small merchants. (Re/code)


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FEDEX EXPANDS REACH IN CANADA: FedEx is expanding its footprint in Canada by building shipping centers in stores operated by Home Hardware restail stores. Although Home Hardware currently operates nearly 1,100 stores across Canada, FedEx hasn't announced how many of those locations will receive a shipping center. The partnership came about as a result of growing competition among same-day delivery services - such as from Amazon, Uber, and eBay. FedEx is feeling pressured to offer same-day delivery to its customers, even if they live in remote areas. By having a denser network of shipping centers, FedEx will be able to ship items quicker throughout Canada. (Wall Street Journal)


APPLE CEO TOUTS 800M CARDS ON FILE: Apple now has 800 million registered iTunes accounts worldwide, most of them with linked credit card accounts. "This is a staggering number," CEO Tim Cook said during yesterday's quarterly earnings call. Eight-hundred million accounts represents a 40% increase from the 575 million accounts Cook announced in June 2013, and we believe it to be several times the number of customer accounts on file at Amazon and Paypal. Apple's huge number of credit cards on file has fueled speculation that Apple will push further into payments. The company is said to be interviewing senior payments industry executives ahead of a major new initiative, but Cook didn't reveal anything further about Apple's plans on the call.


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Apple might have a trove of credit card numbers, but that's only "half of a payments platform," says Thad Peterson, senior analyst at Aite. "The other half of the platform is merchants." One possibility is that Apple's Passbook app will be the launchpad for an eventual mobile wallet. That would involve merchants hopping on board to accept payments through Passbook - perhaps by scanning bar codes generated for the app. But the app has so far suffered from lackluster adoption among merchants, according to former Apple developer Ken Ferry, who helped build it. "There's kind of a chicken-and-egg problem," Ferry said, speaking on the Debug podcast earlier this month. "All of the interest of Passbook has to come from third parties" offering coupons or loyalty programs through it, he said. But Passbook still lacks merchant-friendly features, such as a way for retail clerks to easily send offers or vouchers to the app at the point-of-sale. "Why is anybody going to do it if it's not already interesting?" (Debug)

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Games retailer GameStop plans to open 300-400 stores with a renewed focus on selling and servicing mobile devices, including Apple products. (mxdwn.com)


Also, Amazon and Visa will both report quarterly earnings today. We will send members our first-take analysis after markets close.


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