Ebay Bets On Mobile Payments

Ebay Chief Executive Officer John Donahoe says his company is going mobile.

Speaking at the UBS Annual Global Media and Communications Conference, Donahoe said, This will be your wallet, holding up his smartphone. He highlighted ebay's shift from e-commerce and online auctions to a mobile powerhouse. The company has used several of its properties, including PayPal, Red Laser and Milo.com, to offer user's the ability to pay via their cell phone.

Red Laser is an eBay mobile application that can scan a UPC barcode of a product in a store and then search for comparative prices on both eBay and other online retailers. By adding in Milo.com, eBay has added another level of comparison for consumers. Milo.com will bring up prices of the product at other brick and mortar stores.

Our research showed us mobile users are four times more active than non mobile users, Donahoe said.

Donahoe also spoke of the company's plans to allow users to make contactless payments on eBay transactions with their cell phones. Currently, through a company called Bling Nation, users can make a PayPal transaction with their cell phone. This partnership is only the beginning, Donahoe said.

Large manufacturers won't wait for a standard regarding mobile payments, he said. Merchants will make their own whether it's with RFID, Near Field or Bump Recognition. There will be a variety of different approaches that will help mobile payment apps explode.

Another similar mobile payment option is available through PayPal. Using information from the user's PayPal account, which would have to be completed on the web, they can pay for a product from their mobile phone express checkout style Donahoe said.

I read a survey, 74 percent of people have their phone within six feet of them all of the time. When you carry it around, it has the same relationship with you as you do with your wallet. We think there will be a financial relationship with your cell phone. PayPal is reasonably well positioned to be that digital wallet, he said.

Donahoe said the consumers Ebay has talked to have stated they do not want to put their credit card information on their phone. He says with their express checkout option, they won't have to since it has already been put in on PayPal online. He also stated mobile payments are the safest way to pay for something.

The company also committed to its relationship with PayPal, despite some analyst and expert beliefs the latter may spin off from the former.

Ebay makes PayPal stronger and vice versa. There are a lot of synergies between the two, Donahoe said. When we had Skype, we knew we had a good product, but there was no synergies between us and them and that's why it spun off. That is not the case here.