TechJournal South Header

Posts Tagged ‘PayPal’

Four mobile wallets take early lead in young industry

Monday, January 28th, 2013

mobilewalletAlmost half of U.S. consumers are interested in using a mobile wallet according to  national consumer survey, and four mobile wallets are taking an early lead, according to a review of 20 from various industries by Carlisle & Gallagher Consulting Group.

The mobile wallets were evaluated based on depth of payment capabilities and ease of the overall consumer experience. The 20 wallets also included various transaction technologies, i.e., Near Field Communications (NFC), Quick Response (QR) barcodes and cloud transactions.

Here at the TechJournal, we suspect that mobile payments will become much more pervasive as the technologies evolve and people become used to paying with a phone, and for the same reason ecommerce took off: convenience.

Mobile Wallet Front Runners:

  • LevelUp – Easy set-up, easy-to-use, ability to tie rewards to payments, ability to attach a credit or debit card, accepted at over 3,800 participating retailers.
  • PayPal – Easy set-up, easy-to-use, ability to attach a credit or debit card.
  • Square Wallet – Easy set-up, easy-to-use, ability to attach a credit or debit card, accepted at over 200,000 businesses.
  • Starbucks – Easy set-up, easy-to-use, enhanced consumer shopping experience with rewards, downloads and eGifts.

“The new mobile wallet enabled by smart phones is more than just a payment card – it will improve your entire shopping and transaction experience,” said Peter Olynick, CG’s Card & Payments practice leader. “Within the next 3-5 years, 50 percent of current smart phone users will utilize their mobile wallet for typical, daily transactions.”

Wallets that ranked high on CG’s list met the following criteria:

1. Payment Capabilities: Each wallet was examined for merchant acceptance, payment options (single vs. multiple cards), transaction range including peer-to-peer (P2P), online, and point of sale (POS) functionality, as well as the speed and simplicity of checkout experience (i.e., purchase, receipt, returns).

2. Customer Experience: Each wallet was evaluated for the ease of the initial set-up process, device compatibility, application management, shopping enhancements and other functionality intended to improve the overall shopping experience.

“CG does not believe there is just one technology that will win the mobile wallet race. We believe the long term winning wallets will have the ability to use multiple transaction technologies,” added Olynick. “Wallets that see the highest level of adoption will be those that create an intuitive experience while mitigating consumer concerns about privacy and identity theft.”

Kabbage names Scott Thompson, former president at PayPal, to board

Thursday, September 27th, 2012


Scott Thompson

Scott Thompson, former president of PayPal, named to Kabbage board of directors.

Kabbage Inc., a provider of working capital for small businesses, has named Scott Thompson, CEO of ShopRunner and former president of PayPal, to its board.

Thompson is currently the CEO of ShopRunner, the leading shopping network that enables merchants to bring the best shopping services to consumers.

Prior to ShopRunner, he was CEO of Yahoo, where questions about his resume led to his resignation, although Thompson said it was due to a health issue.

Experience transcends resume flap

Marc Gorlin, chair of Kabbage tells the TechJournal, “He was unbelievable as president of PayPal and understands financial services and data science better than anyone we know.  His experience and assistance far exceeds a trumped up resume flap by a disgruntled investor.”

Thompson served as the President of PayPal from 2008 to early 2012, prior to that he was PayPal’s Chief Technology Officer.  While at PayPal he helped scale the company through its most rapid growth years growing it from $1 billion in revenues to $4.4 billion in revenues, and established PayPal as the leading global online payment service.

“Kabbage is rapidly reshaping the small business financing space in the same way that PayPal reshaped the payments space over the last decade,” said Scott Thompson.

“I enjoy working with, and believe I can have the most impact on, companies that are re-inventing the ways financial services are delivered to consumers and small businesses.  And specifically, by working with organizations that are uncovering new and unique methods of leveraging data science to attack a massive market.  Kabbage has both the opportunity and is on a trajectory to do exactly that.”

Won Entrepreneur of the Year in 2011

In 2011, Scott was awarded the Ernst & Young Entrepreneur of the Year Award for Northern California for his leadership in the Financial Services industry.

“We are thrilled to have the benefit of Scott’s passion, relationships, and experience on as part of our team,” said Rob Frohwein, CEO of Kabbage. “Scott led PayPal through its most formative and highest growth years and we will benefit from those learnings as we continue to accelerate our growth.”

Thompson joins Kabbage’s existing board of directors which includes Rob Frohwein, CEO of Kabbage, Marc Gorlin, Chairman and Co-Founder of Kabbage, Bryan Stolle, General Partner Mohr Davidow Ventures, Jonathan Ebinger, Partner Blue Run Ventures, Bruce Miller, Managing Director Stephens Inc, and Don Butler, Managing Director of Thomvest Ventures.

Visa, PayPal lead in battle for control of the mobile wallet

Monday, September 10th, 2012

Visa and PayPal top the list of consumers’ preferred mobile wallet providers at 15% and 13%, while mobile network operators Verizon and AT&T (with the Isis wallet), and Apple, are close behind.

So says a new report from Javelin Strategy & Research that defines the mobile wallet industry in its initial stages.

To become a valued mobile wallet provider, the report says, consumers consider three important factors—trust, innovation, and privacy. A balanced approach of the three is more important to consumers, as PayPal and Visa have demonstrated with high scores in all three categories.

Personally, we use PayPal as often as possible because it is convenient and easy compared to many other choices. We did have one security incident with PayPal, although it was resolved and we did a much tougher password unique to the service.

The report suggests that financial institutions are well positioned to leverage their customers’ trust to become mobile wallet leaders. It says more than 60% of mobile bankers are likely to adopt a mobile wallet in the next 12 months.

Providers will have to determine which mobile point-of-sale technology – Near field communications (NFC), cloud, and bar code – to use. In the near-term, bar codes and cloud-based wallets will proliferate, as they do not require mobile phone upgrades or merchant investments in terminals and systems.

With Apple’s iPhone 5 coming soon and other new devices following the iPhone, it is expected that NFC chip technology will prevail as it offers the convenience of paying with a simple tap or wave of the phone.

“NFC faces significant barriers to adoption by merchants and consumers, but it is standards-based technology that will eventually prevail as the main mobile point-of-sale technology,” said Mary Monahan, executive vice president and research director, Mobile at Javelin.

“Google was first out the door with NFC and has stumbled. When Apple enters the payment space with NFC, we expect Apple iPhone 5 will lead the way and others will follow Apple’s lead.”

For the full report see:  Battle for Control of the Mobile Wallet: Sorting out Players, Technologies and Strategies to Win

Scott Thompson, briefly Yahoo CEO, to lead ShopRunner

Monday, July 23rd, 2012
Scott Thompson

Scott Thompson

Scott Thompson, briefly CEO of Yahoo and former president of PayPal has been named CEO of ShopRunner, a network of merchants that provides multi-channel shopping services to consumers.

Current CEO and co-founder Mike Golden will continue with the company as its president.

Thompson was CEO at Yahoo from January until May 2012. He resigned, citing illness as a reason, but Yahoo was investigating questions about his resume, which apparently claimed degrees in both accounting and computer science. He actually has a degree in accounting only.

During Thompson’s tenure at PayPal from 2005-2012, the service grew from 50 million to 104 million active users with 8 million merchant partners.

Golden says of Thompson, “Scott and Michael Rubin had worked together for a number of years, and Michael and I took him through the idea of ShopRunner early on. He had an immediate understanding of the potential impact of ShopRunner for consumers and retailers. During his tenure as PayPal’s President, Scott joined the ShopRunner board of directors and we got to see firsthand how much value Scott could add to our business. Michael and I both felt he would be the perfect long-term CEO.”

ShopRunner launched just 22 months ago and has built a strong network of retailers and powerful services for consumers. During this time, the company has also focused on developing an extensive product development road map.

In its next evolution, ShopRunner says it will expand its offerings, both in its breadth of participating merchants, and its benefits to members, including PayRunner, a two-click checkout experience, and ShopRunner PickupPoints – a service that gives members the option to have packages delivered to thousands of convenient retail store locations.

“Mike Golden has built a great foundation with ShopRunner and we both agreed that it is the perfect time to bring in Scott, who we have gotten to know extremely well over the past few years,” said Michael Rubin, CEO of Kynetic, a majority shareholder of ShopRunner. “Scott’s deep understanding of online businesses combined with his team building, operational capabilities, and focus on product will allow ShopRunner to realize its ultimate potential.”

Eighty percent of consumers would use a Paypal mobile wallet

Monday, June 4th, 2012

A study reported by Internet Retailers contradicts the one from CG.

Consumers who are interested in mobile wallets would consider using alternative players to their primary bank for mobile wallets and for banking.

These consumers also expressed strong interest in using a wide variety of services in their mobile wallet, such as search & shop, loyalty programs and real-time incentives.

These are two major findings from a mobile wallet study conducted by Charlotte, NC-based Carlisle & Gallagher Consulting Group, a management and technology consulting firm serving the financial services industry.

However, for a contrary view, a recent study from Catapult Marketing said most consumers were not interested in a mobile wallet. See this report from Internet Retailer.

According to the 605 U.S. consumers who participated in CG’s online study in April 2012, however:

  • Forty-eight percent of survey respondents are interested in a mobile wallet and that interest is driven by both young consumers and affluent consumers. Seventy-six percent of these consumers are currently using or intend to use mobile banking today. This group is divided into two segments:
  • Techno Shoppers (27%): Consumers attracted to shopping and social features of mobile wallets, and effectively using their cards to make the best possible payment decisions.
  • Payment Optimizers (21%): Consumers interested in making the best payment decisions based on their financial situation, loyalty benefits and account management.
  • Eight in ten consumers interested in mobile wallets responded that they would use PayPal as their mobile wallet provider. Six in ten would use Google. Six in ten would use Apple.
  • Five in ten Techno Shoppers would prefer to use PayPal over their primary bank as their mobile wallet provider. Three in ten would prefer to use Google. Two in ten would prefer to use Apple.
  • Consumers interested in mobile wallets would consider alternative players for banking services. Eight in ten would consider using PayPal if it offered banking. Six in ten would consider using Google. Six in ten would consider using Apple.

“The competitive threat from new entrants is real. Consumers are open to considering alternatives to their primary banks to provide mobile wallets and even core banking services,” said Peter Olynick, CG’s Card & Payments Practice Leader.

“People have already slowed their use of cash and checks in favor of credit and debit cards. Within five years, half of today’s smart phone users will be using their phones and mobile wallets as their preferred method for payments. These customers will be using better tools to help them optimize transaction choices. Banks need to proactively consider how their products will stay ‘top of wallet’ in the new mobile wallet world.”

Consumer Frustrations with Credit Cards and Wants with Mobile Wallets

According to the study, consumers place significant value on the benefits of various offers and incentives, from lower interest rates and cash back rewards to discounts and sales coordinated with loyalty programs.

However, they are frustrated with the number of offers they receive and with their ability to track the terms and conditions for each of their cards. Mobile wallets provide a systematic way to mitigate these pain points.

  • The top frustrations for consumers are the inability to manage offers and incentives, and keeping track of payment due dates.
  • Sixty-five percent of respondents rated the ability to make better payment choices – such as maximizing loyalty programs or minimizing interest payments as the most valued mobile wallet service.
  • Eighty-two percent of Techno Shoppers responded that making shopping easier was very valuable and 62 percent believe that mobile wallets will make shopping more fun.

“Banks need to ease the pain points with their mobile wallet features to retain customers,” said Olynick. “We advise banks to update their core transaction processing capabilities today so they will be ready to provide improved transaction and shopping experiences in their mobile wallets tomorrow.”

Easy ways to make mobile payments is considered one of the Holy Grail’s of mobile marketing. But security is often an issue with consumers. Atlanta’s Paymetric has a solution for that.

To request a copy of CG’s research report on Mobile Wallets available in late June, email

Resume padding leads to dismissal for many who do it

Tuesday, May 22nd, 2012
Scott Thompson

Yahoo's CEO for a brief period, and former head of PayPal, Scott Thompson was busted for padding his resume.

Scott Thompson, who recently resigned as Yahoo’s new CEO after he was caught padding his resume, has brought attention to the issue of faking accomplishments on a resume.

According to a new survey by, a popular legal information website, 8 percent of Americans admit to embellishing or exaggerating information on their resume.

And as some recent corporate scandals have highlighted, the consequences can be severe.

More than a quarter of the people who admitted padding their resumes — 27 percent — said they subsequently lost their job when the false information was later discovered.

An additional 3 percent said they were not offered a job after their resume padding was uncovered.

Resume padding involves presenting false or misleading information about one’s education, work experience, professional credentials, job skills or other important personal data.

“With the Internet, employers now have more means to verify information on a resume,” said Stephanie Rahlfs, an attorney and editor with “Even connections with other people via social media such as Facebook and LinkedIn can reveal inconsistencies with the information that you are presenting to employers.

In this age of social networking, people need to be careful not only that their information is truthful and accurate, but also that they are not saying one thing to one person or company, and something different to someone else — whether it’s an employer, prospective employer, friend, family member or acquaintance.”

“As the headlines show time after time, presenting false personal or professional information to an employer is grounds for termination,” continued Rahlfs. ”

Our survey found that when someone provides false information on a resume, more than one-third of the time — 36 percent — the deception is later discovered. And the most common result is the loss of a job.”

Free information on legal “do’s and don’ts” and what information employers are legally allowed to inquire about during background checks on prospective employees can be found at’s Employment Law section at or

The FindLaw survey was conducted using a demographically balanced group of 1,000 American adults and has a margin of error of plus-or-minus 3 percent.

EBay names David Marcus president of PayPal

Thursday, March 29th, 2012
David Marcus

David Marcus has been named President of PayPal

EBay Inc. (Nasdaq: EBAY) today announced that executive David Marcus has been named President of PayPal, effective April 2.

PayPal is the leading online payments provider.

A member of PayPal’s executive management team, Marcus, has been leading PayPal’s rapidly growing mobile payments business and has driven important mobile product innovations.

Reporting to eBay Inc. President and CEO John Donahoe, Marcus succeeds Scott Thompson, who left the company in January.

“David is the right leader for PayPal,” Donahoe said. “He is a successful technology entrepreneur with a passion for great products that engage and delight customers. David leads with a founder’s perspective. He will bring start-up energy to PayPal’s unmatched global reach and digital payments capabilities.

As vice president of Mobile for PayPal, Marcus has helped lead strong mobile payments volume growth and innovation, including PayPal Here.

The new global service includes a free app and encrypted thumb-sized card reader, which turns any iPhone, and soon Android smartphone, into a comprehensive mobile payments solution. With PayPal Here, small businesses, service providers and casual sellers can accept debit and credit cards, checks and PayPal, or send invoices using one simple integrated product.

“Shopping is fun, but paying is not,” Marcus said. “PayPal has an incredible opportunity to make the way people pay simple, easy, and safe – everywhere, and at scale. We’re off to a great start in 2012 with breakthrough products that will truly change the way everyone shops and pays. I’m honored and excited to be asked to lead this unique business and help make the digital wallet an amazing experience for merchants and consumers worldwide.”

In 2011, PayPal processed $118 billion in payments from over 100 million users in 190 countries, including $4 billion in mobile payment volume.

PayPal is now extending its online and mobile capabilities offline, creating innovative in store payments solutions for retailers and consumers. Home Depot recently rolled out PayPal to all of its nearly 2,000 stores nationwide, and PayPal is implementing its point of sale innovations with other national retailers this year.

Marcus joined PayPal in August 2011 after the company completed the acquisition of Zong, a leading provider of mobile payments, where he was CEO and founder.

Who will lead in mobile payments? Apple, Google, Facebook, your bank?

Thursday, March 8th, 2012

 With almost $200 billion in combined 2011 revenues, Apple, Google, Facebook, and Amazon are well positioned to take the lead in mobile payments landscape.

However, the top mobile payments spot is still up for grabs, as consumers trust PayPal, Visa, and their own banks for making financial transactions compared to mobile networks, social media, and online retailers.

“Companies will need to understand how their brand resonates with consumers in the three key areas of trust, innovation and privacy. Brands must partner with companies to achieve complementary strengths and widespread adoption in mobile payments.”

The report reveals the shift in consumer mobile behaviors over the past two years and spotlights emerging market opportunities for mobile wallets.

Mobile purchases skyrocketed

In 2011, consumers’ mobile purchases of physical goods skyrocketed to 41% from 14% in 2009, while those of ringtones, which once dominated the market, decreased significantly. This shift from “nice to have” to “needs” indicates how consumers are beginning to find more value in purchasing via mobile devices.

Using its TIP (Trust-Innovation-Privacy) Model, Javelin scored brand effects of social media, mobile networks, and financial institutions (FIs) on trust, innovation, and privacy.

While PayPal came closest to reaching “Gold Zone”, the high trust-high innovation-high privacy position, no brand placed in the coveted spot.

However, despite overall low scores in all three categories, FIs scored extremely well among their own customers, receiving the highest rankings for trust in security, protecting private information, and even innovation. Facebook and Sprint were the least trusted brands for financial transacting.

“Although consumers rate Apple as the greatest innovator, no brand will reach the Gold Zone without the right alliance,” said Mary Monahan, executive vice president and research director, Mobile at Javelin. “Companies will need to understand how their brand resonates with consumers in the three key areas of trust, innovation and privacy. Brands must partner with companies to achieve complementary strengths and widespread adoption in mobile payments.”

“Don’t count out banks, which are well respected in their geographic markets,” said Jim Van Dyke, president, Javelin. “Our data shows that banks’ own consumers ranked them higher on trust and privacy than payment providers, mobile network carriers, other banks, and the Gang of Four. FIs are viable partners for these mobile payment vendors.”

Javelin’s Gang of Four (and Possibly Five) Apple, Google, Facebook, Amazon – and PayPal report analyzes consumer perceptions of mobile payments players of trust, innovation, and privacy and recommends strategies for social media and mobile companies and FIs to succeed in the mobile purchasing market. The report is based on survey data collected online from more than 5,800 consumers.

Selected Key Report Findings

  • Mobile technology usage is on the rise, paving the way for increased mobile purchasing. By 2016, 72% of adults will use smartphones, while 40% of mobile phone owners will use tablets.
  • Consumers’ mobile purchases of physical goods skyrocketed to 41% from 14% in 2009, while purchasing of ringtones significantly decreased.
  • Consumers with primary banking relationships at FIs gave their own banks the highest trust and privacy scores over Visa, which received top scores among all consumers.

For additional details or to purchase Javelin’s report, click here Gang of Four (and Possibly Five) Apple Google Facebook Amazon – and PayPal: Positioning for Payments in the New Mobile-Social Technology Era

Cyber criminals focusing on popular brand loyalty programs

Monday, February 13th, 2012

PhishTankCyber criminals have maintained their concentration on financial institutions, social media and gaming sites, and are sharpening their focus on popular loyalty programs as well, according to PhishTank, a community website operated by OPenDNS where anyone can submit, verify, track and share phishing data.

Of list of top 10 brands targeted by phishing criminals in January, half are banks or financial institutions. The list includes PayPal, MasterCard and JP Morgan Chase among others.

Top 10 Identified Targets Valid Phishes
1 PayPal 6,317
2 Facebook 993
3 TAM Fidelidade 741
4 Santander UK 537
5 Mastercard 291
6 Cielo 257
7 AOL 241
8 Poste Italiane 211
9 Bradesco 179
10 JPMorgan Chase and Co. 174

Loyalty rewards programs are also becoming a more popular target for phishing, as they allow cyber criminals to not only breech personal financial data, but to leverage victims’ existing rewards points in much the same way they would currency. Two notable Brazilian loyalty programs, Cielo Fidelidade and TAM Fidelidade, made the list of January’s top ten targeted brands.

Last month we reported that cyber criminals took advantage of the holiday season by focusing their efforts on creating phishing sites to spoof financial services organizations and the travel industry.

However, it seems that they’re back to their old tricks again. Social media and gaming companies are again topping the list of most popular brands as their momentum in pop culture increases. Facebook, the world’s second most popular website, climbed back to near the top of the list of most targeted brands in January to become the second most popular target for Internet bad guys.

The PhishTank community submitted nearly 20,000 phishing sites to PhishTank in January and, through a comprehensive review and evaluation process that included more than 78,000 individual votes, deemed 71 percent of those phishes valid.

That means OpenDNS users around the world are now prevented from accessing an additional 13,892 phishing sites. On average, the PhishTank community was able to move suspected phishing sites through the verification process, and eliminate the threat to OpenDNS users, in just two hours.

Since PhishTank was founded in 2006, the PhishTank community has successfully verified more than 800,000 phishes. PhishTank data ensures the safety of more than 30 million OpenDNS users, who are automatically prevented from reaching phishing sites.

In addition, PhishTank protects the collective millions of customers of some of the world’s largest technology companies, many of which use the site’s data to incorporate anti-phishing functionality into their services. More information, statistics and graphics related to January PhishTank findings can be found here:

Majority of smartphone users shopping or browsing for products

Wednesday, January 11th, 2012

smartphonesThe majority of smartphone users (7 in 10) are shopping and/or browsing for products online and will use their smartphone for practically any type of purchase as long as it’s convenient.

These users are also more likely to use electronic payment methods than checks or cash. This, according to a recent study of 2,000 consumers conducted by research consultancy Market Strategies International.

Key findings:

  • Among smartphone purchasers, actual physical goods are purchased in almost equal proportions to digital products (77% v. 74%).
  • The younger the consumer, the more likely that he/she has made a purchase using their smartphone. 51% of consumers ages 18-34 have made purchases with their smartphone, compared to 18% of consumers ages 55-64.
  • Men are more likely than women to make purchases with their smartphone, and they are more likely to buy services. Women, on the other hand, are more likely to buy physical goods. 44% of men in the study have made purchases with their smartphones, compared to 37% of women.
  • Smartphone users are more interested in online and mobile solutions (e.g., PayPal and mobile phone bills) while other, less tech savvy segments are more interested in retaining their traditional payment sources with their current financial institutions (e.g. checking and credit cards).
  • Six in 10 consumers believe that using mobile payment solutions could jeopardize their financial and/or personal security.

Mobile buying on verge of widespread adoption

“Smartphone users are shopping and purchasing through their smartphones at the rate we expected. However, we were surprised to see that users are buying physical goods at about the same rate as apps, indicating that the technology is on the verge of widespread adoption,” said Ann Graham Hannon, vice president of the financial services division at Market Strategies.

However, regardless of age, about one-third of study participants have browsed but have not purchased because they don’t feel comfortable doing so. Clearly, providers of mobile phone payment solutions must address consumer concerns about security of personal information.

“The technology or financial services provider that moves first and fast in convincing customers that its mobile payments solution is secure and convenient will be well positioned as tech-savvy consumers move into greater use of mobile payment technology,” Hannon added.

Yahoo names former PayPal president its new CEO

Wednesday, January 4th, 2012
Scott Thompson

Scott Thompson takes the helm at Yahoo!

Yahoo! Inc. (NASDAQ: YHOO), has named Scott Thompson as Chief Executive Officer, effective January 9, 2012, at which time Tim Morse will resume his role as CFO.

Thompson has also been appointed to the company’s Board, effective January 9, 2012.

Thompson served most recently as President of PayPal, a division of eBay, where he continued his established track record of growing businesses by driving customer engagement built on strong technology platforms.

Under his leadership, PayPal solidified its lead as the global online payment service, expanding its user base from 50 million to more than 104 million active users in 190 countries worldwide, increasing the number of merchant partners to more than 8 million globally, and growing revenues from $1.8 billion to $4+ billion in 2011.

“Scott brings to Yahoo! a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need at Yahoo!,” said Roy Bostock, chairman of the Yahoo! Board.

“His deep understanding of online businesses combined with his team building and operational capabilities will restore the energy, focus, and momentum necessary to grow the core business and deliver increased value for our shareholders. The search committee and the entire Board concluded that he is the right leader to return the core business to a path of robust growth and industry-leading innovation.

“Scott’s primary focus will be on the core business, and as CEO and director, he will work closely with the Board as we continue the strategic review process to identify the best approaches for the Company and its shareholders. As part of this process, Yahoo! is considering a wide range of opportunities for the Company’s business, as well as specific investments or dispositions of assets,” added Bostock.

Infographic: Tech boom or bubble? You decide

Thursday, July 21st, 2011

Fee FightersCHICAGO – Is there a tech boom or are we in another tech bubble? That’s the question that pops up in the face of extremely high valuations for digital media companies, particularly on the West Coast, and whenever a no-profits company such as Linkedin or Pandora launches an IPO. Sean Harper, CEO of Chicago-based, a firm that is like a LendingTree for small businesses looking for services such as credit card processing, says he doesn’t think were in another tech bubble.

“The biggest valuations are similar to those in the bubble era,” he tells the TechJournal, but, he adds, “The companies now have way, way more traction. Companies such as Zynga and Groupon have lots of users and revenues. That’s our perspective,” he says, following the data FeeFighters collected to make the infographic below. “Others could look at the same data and come to the opposite conclusion,” he says.

FeeFighters, a seven employee firm founded in 2009, has raised $1.5 million in backing. It’s provides a shopping platform to help small businesses get better deals on credit card processing, insurance and other financial services. What do you think? Are we in a tech boom or headed for a tech bust? Here’s the inforgraphic:

Boom or bubble

Infographic: Goodbye Wallets, where mobile payments are headed

Friday, July 8th, 2011

Money has evolved throughout history, going from barter to shells to coins then paper and plastic. But the use of various mobile and electronic payment technologies is rapidly gaining ground. PayPal confidently says the wallet will be dead by 2015. “As the trend toward digital currency continues to gain momentum, we are focused on delivering solutions that are not just new and different, but better than what is currently the norm today,” Thompson wrote in a blog post.

“We believe that by 2015 digital currency will be accepted everywhere in the U.S. -– from your local corner store to Walmart. We will no longer need to carry a wallet, ” he added.

On the heels of PayPal’s buy of mobile payments firm Zong for $240 million, professional community service company G+ created an infographic that explores where mobile payments may be headed.

Goodbye Wallets

Google loses Linux patent suit, faces other challenges to Android OS

Monday, April 25th, 2011

GoogleWhen a federal jury ruled against Google last week, awarding Bedrock Computer Technologies Inc. $5 million for infringement of a Linux kernel patent, it stirred up fears that the decision could have implications for other Linux users and Google’s much-sued Android mobile device operating system.

While Bedrock got no where near the $180 million it asked for in its suit against Google in the Eastern District of Texas federal court, it is cause for worry to other Linux users. Bedrock has also sued Amazon, MySpace, PayPal, Yahoo, AOL, and others, while Raleigh-based Red Hat, a Linux distributor, is suing Bedrock in an attempt to invalidate its patent. The Linux kernel is at the heart of Google servers and its Android OS is also built on Linux.

The patent in suit is: U.S. Patent No. 5,893,120, on “methods and apparatus for information storage and retrival using a hashing technique with external chaining and on-the-fly removal of expired data.”

In a statement, Google responded to the court decision, saying, “”Google will continue to defend against attacks like this one on the open source community. The recent explosion in patent litigation is turning the world’s information highway into a toll road, forcing companies to spend millions and millions of dollars defending old, questionable patent claims.”

Google’s Linux-based Andoid OS faces 14 other patent suits even as it has rapidly become the leading smartphone operating system.

This case and others – such as Apple Inc.’s against Samsung Electronics that claims Samsung copied iPad and iPhone designs – point up the need for some sort of patent reform when it comes to software.

Following the verdict in the Texas case, some analysts suggest others being sued may elect to pay fees rather than go to court.


TechJournal South is a TechMedia company. TechMedia presents the annual conferences:


Internet Summit:

Digital East:

Digital Summit:

PayPal express checkout boosting online sales

Wednesday, March 9th, 2011

PayPalPayPal says its Express Checkout Service is boosting sales for online merchants. The company released a report from Ipsos Public Affairs that shows that eight of ten PayPal merchants surveyed say adding the one-stop payment option has increased their sales.

They say sales have increased an average of 18 percent since they added the service.

I get it. I use the PayPal checkout myself whenever possible. You don’t have to fill in credit card info, so it’s faster and less of a hassle. Seamless payment systems have the potential to make all online buying much simpler. I’ll go back to a site using it more often than to one where I have to enter all my credit card and payment info every time.

Google has started its own Google Checkout digital payments service, and mobile phone payment systems are likely in nearly everyone’s future.

The Iposos report says 83 percent of merchants using the express checkout service saw sales increases, most seeing them within three months of adding it. Some, about 8 percent, say it took four to six months or longer before they saw increases.

The merchants say 22 percent of their revenue now flows through the service, with 25 percent of new customers using it. — Allan Maurer

ChannelAdvisor event bringing stellar lineup to Durham in April

Wednesday, March 2nd, 2011

ChannelAdvisorRESEARCH TRIANGLE, NC – ChannelAdvisor, a software and services solution provider that enables online retailers to sell more across e-commerce channels, is bringing a stellar lineup of ecommerce speakers and participants from Google, eBay, Yahoo!,  and PayPal, among others, to its annual Catalyst conference networking event April 4-6.

Accelerate Your E-Commerce is thetheme of the conference, which is being held  at the Washington Duke Inn & Golf Club in Durham, NC.

We have attended these intimate events and they make it easy for those who attend to connect with top executives from major companies.

“This year’s Catalyst agenda includes our most exciting line-up of keynote speakers and presenters yet,” said Scot Wingo, CEO of ChannelAdvisor.

“We’re thrilled to have Google, eBay, Yahoo!, PayPal, Sears Marketplace and dozens of others on board to anchor this year’s event. Catalyst is an invaluable experience for attendees, bringing together the most contemporary e-commerce visionaries to address the latest technologies and trends. If you’re in online retail today, this event is a must attend.”

Leaders from the following companies are currently slated to participate:

  • Google
  • Forrester Research
  • eBay
  • eBags
  • Sears Marketplace
  • Crocs
  • Lucky Brand Jeans
  • Plow & Hearth
  • PayPal
  • Yahoo!
  • Shipworks
  • Ingram Micro Logistics
  • Cloud Conversion
  • Listrak
  • eAccountable

For more information see:

Kabbage feeds capital to online sellers

Friday, February 4th, 2011

By Allan Maurer

Kabbage, ( which just planted $6.65 million led by BlueRun Ventures in the bank, is a company with one of those innovative ideas that could not have happened at a better time. The company makes working capital advances via PayPal to qualified online sellers.


Marc Gorlin, chairman of Kabbage, at the 2010 Internet Summit in Raleigh, NC

“There is no faster way to raise working capital on the planet,” says Chairman Marc Gorlin. Out of Beta for a short time, Kabbage has doubled the number of clients it had previously.

It has been making advances of from $2,000 to $12,000 and is going to move up to advances of $25,000 to $40,000 over time, says Gorlin. “If they can get access to capital, they can truly grow their business.”

The alternative method of raising capital offers online sellers another option in one of the worst climates for obtaining small business credit from banks in history.


Kabbage co-founder and COO Kathryn Petralia on the motorized beer cooler the company won at a PayPal X developer conference

This Internet thing is just a fad

“Take a company like Zappos,” says Gorlin. “They were doing $50 million in revenue before they got their first credit line from a bank. Many local companies doing $5 million or $6 million can’t get credit. A company in Minnesota referred to us was selling hardware and had a run rate of $4 million a year from online sales. They went to a bank for money to expand. The bank told them this whole Internet thing is just a fad – and that was this year.”

While traditional bankers want to walk wooden floors and see actual customers, Gorlin points out that “There is actually a ton more data online.”

Using that data, Kabbage qualifies sellers in a matter of minutes from about 200 data points in PayPal and eBay – how long a store has been online, it’s seller rating (which indicates how well they treat their customers), PayPal charge backs, volume of sales and much more. Kabbage has made advances to companies selling everything from American Indian jewelry to model trains, plus size men’s clothing, odd sized men’s shoes, china, and collectibles. “It’s a diverse list,” says Gorlin.

The companies agree to paying back one-sixth of the advance each month via PayPal and can pre-pay with no penalty. Kabbage makes from 6 percent to 16 percent of the advanced amount in fees depending on the firm’s credit history and volume. Down the road, Gorlin sees the possibility of giving online sellers a “Kabbage score” based on its data and increasingly sophisticated analytics. It can, for instance, tell over time which data points may be most predictive of small business success online.


Robert Frohwein, CEO of Kabbage, has been CEO of LAVA Group Inc., an intellectual property investment bank, a founder and the managing partner of Sentry Law Group, and founder of MediaWheel

Hold it while we check your Kabbage score

Banks may eventually use the Kabbage score to open up their own loan coffers, Gorlin suggests. “We could be the means by which banks get more money to small businesses by automating the process for them,” Gorlin notes.

Data analysis Kabbage has done for its own customers shows that “Margins for online businesses are stout. A lot of them won’t sell things for less than a 100 percent margin, they are not paying rent on a store, they don’t have shelf space to fill or need people to talk to customers. They do have different fees on PayPal and eBay, but by and large, the customers we see are running high margin businesses.”

Founded in late 2008 by Gorlin, CEO Rob Frohwein, and Kathryn Petralia, COO, the company attracted high profile investors who include  David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund, in addition to BlueRun. The company says the funding will let it expand its financing service beyond eBay merchants to marketplaces such as Amazon, Etsy, Overstock and so on.

Talking to Gorlin, you can tell he gets a kick out of helping small businesses while building his own. Kabbage itself still has a classic startup culture, says Gorlin, a serial entrepreneur who was a co-founder of Pretty Good Privacy (NYSE:MFE), Vertical One Corp. and the Lanta Technology Group.

Startup culture, he says, “Is something you can’t recreate in a big company. You work the number of hours you do to create something out of nothing and you have to burn off some steam.”


So, there are nerf guns. Oh yes, and there is the motorized beer cooler. Kabbage won it as the audience choice prize at a PayPal X developer conference in San Francisco. “I guess you could put something besides beer in it,” says Gorlin, “but I wouldn’t know why.”

On the heels of its funding, Kabbage has already selected larger new offices in Atlanta and will be hiring. It currently employs eight people and expects to hit 15 or so in the next 60 to 90 days. But if you’re going by, watch out for the nerf guns.

Reprinted from our sister publication,