PayPal Mobile Services Get Major Boost in Internet Retailing

DVD Empire is among the first of what will apparently be a series of Internet merchants this summer to adopt a new payments service offered by PayPal Mobile. The Warrendale, Pa.-based online seller of DVDs is going live with a Wireless Application Protocol (WAP) site for mobile phones, with payments handled by PayPal Mobile Checkout, a new service from San Jose, Calif.-based PayPal Inc. intended to support mobile commerce. With WAP, merchants can sell their products through a site specially designed for small cell-phone screens. On Thursday, the online merchant also started accepting payments via Text to Buy, a PayPal Mobile service that allows consumers to make impulse purchases of merchandise by entering a short code and merchant phone number in their cell phones. By enabling mobile commerce, DVD Empire hopes to appeal to a younger audience that is accustomed to text messaging and using their handsets for data services. “We're targeting kids who download ring tones,” Alicia Berry, director of operations at the merchant, told an audience Monday at the Internet Retailer Conference & Exhibition in San Jose, Calif. Up to now, the companies using the 14-month-old Text to Buy have largely been media companies, manufacturers, and consumer brands like Fox Home Entertainment (DVDs), Sony BMG (CDs), NBC/Bravo (television-show merchandise), and the National Basketball Association (team- and league-related merchandise). Besides DVD Empire, about 20 online retailers will be adopting Text to Buy and Mobile Checkout between now and the end of August through an integration developed by CardinalCommerce Corp., says Jason Murphy, a vice president at the Mentor, Ohio-based company, whose software helps e-commerce sites enable alternative payment methods and online authentication systems. “We will launch in phases, and it depends on the merchants' schedules,” Murphy says. CardinalCommerce, which began supporting Text to Buy in October, is building WAP sites for merchants that want to accept payment via PayPal Mobile Checkout. The service allows online merchants to sell all or some of their merchandise through the specially configured sites by loading their catalogs onto the platform. Murphy says CardinalCommerce's m-commerce initiative will ultimately feature a number of payment methods, but its initial focus is PayPal. In her presentation, Berry would not specify the fees DVD Empire is paying for its Text to Buy transactions, but said they are “pretty reasonable.” “Basically, our company has bought the hype of mobile,” she joked. PayPal has not disclosed merchant fees for PayPal Mobile. For the time being, CardinalCommerce is not charging merchants transaction fees for PayPal Mobile Checkout. With Text to Buy, PayPal Mobile accountholders text a product code to a phone number established by the seller. The short-message-service (SMS) transmission triggers a transaction that PayPal handles on the back end as it would any other PayPal payment. Sellers advertise the service, including the data for the SMS transmission, in public places where handset users can respond by making on-the-spot purchases. Berry tells Digital Transactions News DVD Empire is promoting its Text to Buy products through messages on TV.