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Three Questions for PayPal’s New Boss

David Marcus aims to push the service into physical stores.

PayPal has built up its mobile offerings in the past several years, so it was no surprise when it named David Marcus, formerly its vice president of mobile, as president in March.

Payment president: David Marcus of PayPal.

Marcus joined PayPal in August 2011, when eBay paid $240 million for his startup, Zong, which lets someone using the service use his phone number to shop on his phone and get billed through his wireless carrier.

Last week, PayPal announced that 15 new retailers—including Office Depot, Barnes & Noble, and JCPenney—will soon accept PayPal in their brick-and-mortar locations. The Home Depot already accepts PayPal in most of its 2,000 U.S. stores.

1. Soon I’ll be able to use PayPal at a variety of retailers, just by providing my cell-phone number and PIN. Are we on the verge of getting rid of cash and credit cards?

Ultimately the consumers will decide how they want to pay. But the payment experience, to me, is going to move out of the way. My favorite [example] is location-based payments, where the merchant knows you’re in the store, and the transaction happens with no friction, flawlessly, without you doing anything.

2. What’s the advantage of that?

That becomes a tool for the merchant to treat you well and to welcome you. If you go to Peet’s Coffee in San Francisco but now you want to go to Peet’s Coffee in Palo Alto, you’re greeted by your name despite the fact that it’s your first time in that store. They know what your favorite drink is, and they’ll prepare it for you. We remove the friction from the payment experience—nobody likes to pay, everybody likes to shop—but we also, by doing that, enable you to have the best possible shopping experience.

3. There are a lot of companies that have come up with innovative ideas in mobile payments, including Zong, the company you ran before it was bought by eBay, PayPal’s parent company. What’s PayPal’s advantage?

Innovation at scale in payments is really hard. It’s really easy to get some initial buzz when you launch a product. To this day, no one has succeeded signing up consumers at a meaningful scale for a digital wallet service—no one except us. We need to continue innovating, [but] as long as we continue doing that, because we have the scale advantage, we’ll be fine.

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