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Last updated: January 17, 2013 12:11 am
Ebay outlined ambitious plans to test new customer usage of its mobile payments service in stores and restaurants in 2013, as it looks to double the size of its PayPal business.
“Mobile is becoming the new normal,” said John Donahoe, chief executive.
He outlined a new partnership with NCR, the maker of in-store payment hardware, which will allow diners at restaurants to pay their bill from their smartphone, without needing to ask the server for the check.
PayPal is also working with Jamba Juice, the smoothie chain, to allow customers to pre-order and pay for a smoothie from their smartphones, then pick it up in the store without having to wait in line.
“If we get one per cent of offline retail, it doubles the size of PayPal,” Mr Donahoe said. “We think this is an enormous white space and we’ll go after it aggressively.”
Ebay benefited from the surge in mobile shopping through the holiday season to deliver slightly better than expected fourth-quarter results. People increasingly bought gifts on their mobile devices, lifting eBay’s revenues to $3.99bn for the quarter, a rise of18 per cent from the same time last year.
Under prescribed accounting rules, eBay recorded a 62 per cent loss for the fourth quarter due to the effect of a profit in late 2011 from the sale of its remaining stake in Skype to Microsoft. Net income by these measures was $751m compared with $1.98bn the year before.
On a pro forma basis, preferred by Wall Street, it reported earnings per share of 70 cents, or a 17 per cent increase. Analysts had anticipated $3.97bn in revenues and earnings per share of 69 cents. Net income for the fourth quarter was $927m on a pro forma basis.
Revenues for the full year 2012 were $14.1bn and earnings per share were $2.36, both at the top end of the guidance range the company issued last year.
For the full year, eBay mobile sales doubled to $13bn compared with 2011. Mobile payments on PayPal tripled to $14bn.
Mobile shopping and payment trends have helped PayPal attract new users, particularly among younger consumers and in emerging markets such as Brazil and Russia.
However that has resulted in the number of transactions per user going down, said Bob Swan, eBay’s chief financial officer, because new users tended to use the site less frequently.
“Now we have to drive that user base to be more frequent over time,” he said.
eBay’s share price rose about 1 per cent in after-hours trading to $53.44.
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