"I've got one word for you Kimmy.......": Paypal !...

"I've got one word for you Kimmy.......": Paypal !

https://www.copyright link/business...market-with-digital-shopfront-20180903-h14v80

PayPal disrupts $2.5b gift card market with digital shopfront

Twenty years after disrupting the payments industry, PayPal is threatening to disrupt Australia's $2.5 billion gift cards market by launching a digital gifting store.

PayPal will unveil on Tuesday an online storefront where consumers can buy digital gift cards from a range of about 40 retailers and brands including Woolworths, Myer, David Jones, JB Hi-Fi, The Iconic and Rebel Sport.

The e-commerce store represents PayPal's first move into retail and is likely to be followed by further moves as the 20-year-old online payments facilitator attempts to stay relevant as consumers become more comfortable using credit cards online and as new players such as Afterpay enter the market.

Gift cards are the most popular gift given in Australia, with almost 90 per cent of Australians having given or received a gift card in the past year.

However, according to PayPal Australia's head of marketplaces, Alison O'Brien, most gift cards are physical rather than digital and are bought directly from retailers or from supermarkets such as Woolworths and Coles, which do a thriving business in gift card sales.


"We pride ourselves on being an incredibly tech savvy nation and yet we're still going into physical retailers and buying physical gift cards, which is a fairly sub-optimal experience for the person buying the gift," Ms O'Brien told The Australian Financial Review. "And the person receiving the gift has to remember to bring the gift card with them."

Ms O'Brien believes the Australian gift card market has reached an inflection point, where digital cards will start to become more popular than physical cards.

"We think the gift card industry is ripe for disruption  .... we're trying to position ourselves as the gift card market leader," she said.

Many Australian retailers sell digital gift vouchers and there are several online gift card marketplaces. The largest is Prezzee, which was founded in 2014 by Claire Morris and  Matthew Hoggett and is backed by The Precision Group. Others include eBay, PayPal's former parent, giftcardstore.com.au, which sells universal pre-paid Visa and EFTPOs gift cards, Giftvouchers.com, a division of Wright Express, and Target, which sells gift cards from a range of brands including BCF, Super Cheap Auto and Netflix.

Ms O'Brien believes PayPal represents a more compelling partner for retailers because of its 7.2 million active customers in Australia and a more attractive gifting destination for consumers because of its easily accessible store front and security of payments.

Consumers buying digital gift cards need to use their PayPal account but recipients do not have to have an account.
"There are a few players but we think we can position ourselves in a really powerful way," Ms O'Brien said.

"We're working with a number of large Australian companies to offer an experience where consumers can log into the store front online or on mobile and be presented with a really large range of retailers," she said.

"They can shop by category or by occasion, leave a personalised message and schedule the time of day that it's delivered – that kind  of experience, optimising the gifting experience, is not something we've seen."

PayPal will earn an undisclosed commission on sales of gift cards and will also partner with retailers to offer jointly-funded discounts, For example in the first week PayPal is offering 15 per cent discounts on gift cards for catch.com.au and The Iconic.

In the second phase of the launch, the gift card shopfront will be available on the PayPal app and the group will seek to sign up smaller retailers.

The payments company has been exploring new ways to stay relevant with consumers after being demerged from eBay in 2015.

Earlier this month US brokerage firm Jefferies Financial Group reiterated its buy rating for PayPal, predicting the company would grow faster than the e-commerce industry.