PayPal Introduces Another POS Option for SMBs

We’ve always appreciated PayPal‘s focus on the small business space. And oh, by the way, the company’s valuation is around $350 billion.

We may have written about the company’s acquisition of iZettle three years ago when PayPal paid more than $2 billion for the Swedish SMB-focused payments platform. It was PayPal’s largest-ever acquisition. At the time, analysts read the deal as PayPal flexing to compete more aggressively with Square. At the time Quarewas acquiring small business customers at a rapid clip. 

The Pivot to POS

That brings us to this week’s announcement that PayPal Zettle is launching to offer a digital POS solution to help small businesses manage sales, inventory, reporting, and payments across multiple channels. And all in one place. The new offering will allow merchants to accept QR codes, debit cards, credit cards, and digital wallets.

A quick side note. It’s funny how we’ve mostly ignored QR codes over the past decade or so. Then the pandemic hit. All of a sudden QR codes were all the rage, driven by contactless ordering and digital menus. 

PayPal’s Big POS Acquisition Targets Square

PayPal’s goal is the same as many others operating in the local and small business space. It wants to offer small businesses across the spectrum the capacity to respond to their customers by offering them a seamless transaction experience. Both in-person and virtually. As Jim Magats told PYMTS.com in an interview, “For us, it’s a natural extension of what we’ve been doing online and on mobile over the course of the last 20 years; serving SMBs with an in-store solution that interoperably works with an online solution. It’s the next stage of our evolution into omnichannel payments.” 

Helping Local Merchants Compete

For consumers, the notion of ordering something online only to find out that the local shoe store really didn’t have that size 10.5 is troubling and forces consumers to turn back to the gorilla aka Amazon for fulfilling the order. That makes it tough for a local business to compete.

By offering a solution to the local merchant that can sync inventory with the website so that when the customer orders a 10.5 shoe, it is there for pick-up is critical. And we know the local shoe store could cobble together lots of different data feeds within its existing systems. But guess what? That’s not their business. So PayPal Zettle is designed to make all that happen seamlessly. 

PayPal Looks Ahead to Cashless Future

Magats when on to say this. “When we say, ‘small business in a box,’ we mean that it really simplifies running the business, so they can focus on getting more customers to their storefronts. [PayPal Zettle aims] to take all these point solutions, bring them together and then curate them, so that business owners can operate in a much more configurable, easy way.”

The Venmo Connections

One of the big opportunities PayPal sees in leveraging its large “local” consumer base via its Venmo platform. The new POS offering allows small businesses to take QR code payments, specifically from PayPal and Venmo customers, without a separate integration. Magats noted that Venmo customers are local in nature. He added that the “ability to bring those customers into local businesses and have those payments appear on consumers’ feeds presents an entirely new take on leveraging social commerce in local contexts.” 

We’re very interested to see the play PayPal makes with Venmo and this new initiative. The ease of use of Venmo is really remarkable. If after three years of owning iZettle PayPal can apply what it’s learned about “ease of use” to Zettle it should be a home run for consumers. And by extension, the small businesses that choose to leverage the new offering.

Ease of use is really is what will define the next decade of compelling customer experiences. Let’s see what happens. And how Square responds. 

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