PayPal Inc. is developing a reseller program to help it move into point of sale payments.
The program is still in its early stages, so the eBay Inc. unit had few details to share, but the program would build upon PayPal's partnership with the terminal maker VeriFone Systems Inc.
"We will work proactively with independent sales organizations to ensure the [mobile] business model works," said Laura Chambers, PayPal's senior director of mobile.
PayPal is a force in e-commerce transactions. In 2009, PayPal, which like VeriFone is based in San Jose, Calif., handled $72 billion in payment volume, a 20% increase from the previous year. PayPal's merchant-services segment processed $39.5 billion in payments last year, an increase of 33.9%.
VeriFone plans to add PayPal acceptance to its hardware after Jan. 1. Under an agreement between PayPal and VeriFone, merchants using PayWare Mobile, a card-acceptance device that fits over Apple Inc.'s iPhone, would be able to accept PayPal funds by bumping their phones with PayPal users' iPhones.
The agreement also calls for VeriFone to use its PayWare Mobile card-encryption sleeve to expand PayPal payment acceptance via mobile phones and to integrate PayPal with online and point of sale environments.
In addition, the terminal maker would promote PayPal and the bump funds-transfer function to its reseller channel, and PayPal would market PayWare Mobile to its user base.
"Merchants tell us they want us in more of these transactions," Chambers said.
Two years ago, PayPal had $25 million in mobile transaction volume, and it expects to handle more than $700 million in such volume this year, Chambers said.
In October PayPal added Bling Nation Ltd. payment functionality to its iPhone app. In September, VeriFone announced it was adding Bling Nation acceptance to its terminals.
Bling Nation has usually relied on community banks to make deals with local merchants for its alternative payment program, but it now is forging deals such as the ones involving PayPal and VeriFone to speed its growth.
Chambers said that PayPal is "working with VeriFone to get the right model" for the reseller program.
VeriFone says its reliance on ISOs as a sales channel is an important element of the PayPal deal.
ISOs and processors will have another payment method to talk with merchants about, said Paul Rasori, VeriFone's senior vice president of global marketing.
VeriFone and PayPal realize that some individuals may be concerned about PayPal's growth, and the companies "understand the value" of ISOs and their sales agents, Rasori said.
"We don't have a direct-to-merchant strategy whatsoever," he said.
For PayPal, there has to be a revenue share to get access to VeriFone's sales channel, Rasori said. He said he expects the amount will be "in line with what [ISOs] typically make from normal credit and debit card transactions."
