PayPal Acquires Card.io
Michael Harper for redOrbit.com – Your Universe Online
Internet payment giant PayPal has long been a ubiquitous way to send money over the internet. Facing some serious competition from Square, a mobile payment company founded by an ex-Twitter pioneer, PayPal has bought a mobile payment startup of their own to integrate into their existing mobile payment offerings.
PayPal announced yesterday they had agreed to buy Card.io, a San Francisco startup whose technology allows for mobile payments by simply snapping a picture of a credit card. PayPal did not, however, discuss the financial terms of this acquisition.
“We first met with the team at card.io when we were working on integrating their technology into the PayPal Here mobile app. While working with them, we were simply blown away by the creativity and drive of their employees,” writes PayPal’s Vice President of Global Products, Hill Ferguson on their PayPal blog.
“The employees at card.io will be joining the PayPal global product team in San Jose to help us create new experiences to make it even easier for consumers and merchants to use the PayPal digital wallet.”
Though the Card.io employees will be moving several miles south to San Jose, they’ve said they will continue to keep their SDKs available and open to any developer who wants to fold their technology into Android or Apple apps.
This acquisition is the latest move by PayPal to bolster their mobile offerings as competition from Square and other mobile payment systems continue to heat up.
Square, which was started in 2010 by Twitter co-founder Jack Dorsey, works with a small card reader which can be plugged into smartphones and tablets. A user can swipe a credit card through the reader and receive instant payment on-the-go. PayPal has been working on their own card reader—choosing a triangle shape instead of Square’s black cube— to work with their PayPal Here mobile app. In addition to swiping, the PayPal Here app also allows for snapping a picture of a credit card to accept payment.
In his blog, Ferguson says their acquisition of card.io is akin to eBay’s $240 million acquisition of mobile payment startup Zong last year.
“The card.io team is joining PayPal for the same reasons that the Zong team was excited to join PayPal last year – to get the opportunity to work on projects that will accelerate innovation at a scale that’s just not possible at a startup.”
PayPal has plenty of reasons to pursue mobile payments. According to an IDC report last week, the number of Americans making mobile payments has more than doubled. These payments have become so possible in recent years, 33% of those surveyed by IDC had used a mobile payment system in the past year. To their credit, more than half (56%) of respondents reported using PayPal’s mobile payment system. About 40% of those surveyed said they had used Apple’s iTunes service for mobile payments.
Talk of mobile payments has increased in recent months as industry analysts and experts speculate about whether Apple will finally implement their own NFC mobile payment service. The next iPhone is expected to release this fall and could boast a brand new feature which would allow users to make payments with their phones via a native app.