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eBay’s new initiatives to increase its presence on mobile devices

Puneet Sikka

eBay shows strong growth but the competition is rising (Part 4 of 8)

(Continued from Part 3)

eBay’s partnering with mobile and telecom companies

In the previous article of this series, we discussed why eBay (EBAY) has lagged behind other Internet companies in terms of mobile usage. We mentioned that eBay’s low mobile usage is perhaps because people haven’t yet become comfortable processing transactions on mobile devices. However, eBay has started to take a few initiatives to tap into the growing mobile commerce market. Recently, it announced mobile partnerships with Samsung (SSNLF) and Deutsche Telecom (DTEGY), in which Paypal will be the first global payment company to enable fingerprint authentication for payments on the Samsung Galaxy S5 smartphone. It will also allow Deutsche Telecom’s 144 million customers to make purchases to their mobile phone account with PayPal.

The mobile commerce market shows strong growth

Along with eBay, Amazon (AMZN) and Apple (AAPL) are some of the bigger players in the mobile commerce market. According to eMarketer, the U.S. retail mobile commerce market will grow from $42 billion in 2013 to $58 billion in 2014 at a growth rate of 37%. The report also predicts that this market will grow to $133 billion by 2018, accounting for nearly 27% of retail eCommerce sales and 2.4% of total retail sales in the U.S. Interestingly, the report also mentions that two-thirds of these mobile commerce transactions will come from tablets in 2014, which will increase further to 75% by 2018.

eBay acquired Braintree to boost its mobile offering

In September 2013, eBay acquired Braintree for $800 million, Braintree is a payments company that supplies technology to process mobile credit card transactions. Braintree’s Venmo app helps people instantly wire money to their friends’ bank accounts from their phones.

eBay’s management mentioned, “We’re continuing to invest in mobile. And If you look at technology, mobile investment is a big priority, whether that’s PayPal mobile, whether that’s the investment of Braintree, whether that’s growing Venmo’s peer-to-peer business, which doesn’t have any revenue, but extends PayPal and Braintree and Venmo’s reach. So we will continue to invest in mobile, continue to invest in the technology platform, and the replatforming of that PayPal technology platform.”

Continue to Part 5

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