“What Paydiant has is a clarity of focus on mobile and how large merchants need to utilise mobile to connect with their customers — they’re a small company doing that very successfully with some really cool brands,” Anuj Nayar, senior director of global initiatives at PayPal, has told NFC World as the payment giant prepares to complete its acquisition of the payments platform provider for a reported US$280m.

ANUJ NAYAR: Taking a different approach to mobile payments

“Paydiant is a 70-person company that has two things; incredible technology that’s been battle-tested with large merchants,” Nayar adds. “They white-label their technology and work with the merchants to create something that helps them connect with their consumer.”

The company has built a cloud-based mobile wallet platform that includes mobile payments, loyalty, offers and ATM cash-access functionality. Merchants and banks use the solution to deploy their own secure mobile wallet solutions under their own brands and in their own apps. Customers include Subway, Harris Teeter and CurrentC, the soon-to-launch mobile payments system developed by the MCX consortium of large US retailers.

Paydiant’s involvement with MCX is not the main reason for the acquisition, however, Nayar says.

“MCX is an incredible consortium of retailers in the US; it’s an important piece, [but] it’s not the only reason,” he explained.

Instead, PayPal sees Paydiant as a differentiated route into in-store payments, at a time when competition is piling in.

“The way that we look at it, there are three views of how this is going to roll out. The first is the Apple Pay-Samsung opportunity, which is the least revolutionary of the ways of approaching this. They’ve basically put a digital wrapper on the existing financial infrastructure using tokenization and HCE — that’s the 1% of the top of the transaction, the rest of it just sits exactly the same. On the Google-Softcard side, they’re very much taking a carrier-based approach.

“So you’ve got the credit card-based approach and the carrier-based approach. Both of which have benefits, we can see where they’re going with this.

“The advantage of the credit card-based approach is you’re not re-creating anything, you’re taking the existing complicated financial infrastructure and getting a new way to utilise your phone to do that.

“It’s not a payments play, it’s a selling phones play,” Nayar asserts.

“We’ve taken a different approach. We really have two customers; we have consumers and we have merchants. Anything we can do to make it easier for the merchant to connect to the consumer and then get out of the way of the rest of it is the approach we’re taking.

“The digital wallet piece and the platform piece sit directly into that. We reorganised the entire company into two businesses; one that is everything to do with the consumer, one that is everything to do with the merchant.

“So the Paydiant team will report into that merchant and next-generation commerce team run by Bill Ready, who was the CEO of Braintree.

“His organisation includes all of PayPal’s merchant products, all of Braintree and the other next-generation ideas. Paydiant is going to join that team. They’ve got great technology and they’ve also got a really good understanding of what large merchants are looking for to connect with their customers.”

And PayPal is prepared and is ready to take on all comers, he asserts. “We think we have the best digital wallet. We have 162 million people that use it on a regular basis.

“Five years ago, your online and your physical worlds were completely separate. Now they’re not. You seamlessly switch between them all day, every day and the two are completely intertwined now.

“You want your shopping and your payments to follow you, and that’s definitely a major piece of our strategy — to ensure that PayPal offers the best experience for you with the digital wallet.”