Ebay is preparing to expand the range of digital currencies it accepts and said that its payments unit PayPal may one day incorporate Bitcoin. “Digital currency is going to be a very powerful thing,” John Donahoe, eBay chief executive, said in an interview with the Financial Times.
The ecommerce group, which has more than 124m active users, is initially focusing on incorporating reward points from retailers’ loyalty schemes into its PayPal wallet. “We are building the container so any retailer could put their loyalty points into the PayPal wallet,” Mr Donahoe said. “There is a limit to how many cards you will carry, or remembering what points you have or don’t have,” he said. “But in a digital wallet, you can put 50 different loyalty cards.” Mr Donahoe said Ebay was not expanding the PayPal wallet to include Bitcoins, “but we are watching it”.
“That same technology could accept other digital currencies,” he said. eBay’s efforts raise the possibility that virtual currencies such as Bitcoin may in time move beyond a niche role in online commerce. Some enthusiasts believe Bitcoin and other currencies that exist outside the traditional banking system represent the future of online payments. The work to expand the PayPal wallet underlines the emergence of virtual payment systems as the latest front in the battle between the global technology giants, including Google and Apple, to increase consumer reliance on their products. Corporate initiatives have sought to drum up interest in digital wallets for use online and on the high street.
Companies from mobile and technology groups to banks and retailers are racing to use new mobile wallets to upend the payments business. Most of these efforts have focused on new ways of paying with traditional currencies such as the pound and the dollar, rather than with niche mediums of exchange such as loyalty points or Bitcoin. Bitcoin transactions are conducted through a peer-to-peer network of computers, outside the traditional banking system and largely beyond the control of governments and monetary authorities.
The digital currency is accepted by very few retailers at present. Ebay has in recent years sought to bring more large retailers on to its ecommerce platform, which started as an auction side for small traders. Ebay recently teamed up with Argos to allow customers to collect goods from 150 of the British retailer’s stores. The ecommerce group also has a partnership with Nectar, the UK’s largest loyalty programme, allowing customers to collect points when they spend money through eBay. Mr Donahoe said that ecommerce had yet to combine the more “utilitarian” nature of shopping online, with the “social experience” of shopping at the mall or on the high street.
For full article click here