PayPal's new digital wallet app is powerful but baffling
Will anybody ever get mobile payments right? — Hill Ferguson ordered a smoothie. Using a newly redesigned app for iOS and Android, PayPal's lanky director of product selected a peach concoction and paid for it with a couple taps on his smartphone.
Context & Ripple Effects
This redesign is the third act of a wallet push PayPal has been building since its 2010 revamped iPhone app with Bump-powered phone-tapping transfers. In March 2012 the company laid out the ambition explicitly — a digital wallet offering personalized deals and flexible payments — and today's iOS and Android release is that vision shipping to users.
The rollout lands amid an unusually broad press echo (ReadWrite, TechCrunch, The Next Web, VentureBeat, NYT Bits and others all carried it), and against a backdrop where PayPal has been retooling its plumbing: the card.io camera-card-scanning acquisition in July 2012, a scanner aimed squarely at Square's territory, and CISO Michael Barrett's May 2013 argument that passwords and PINs are headed for replacement by open-standard authentication.
First-order effects
- PayPal's 100 million-plus users get a feature-dense wallet app, but reviewers' verdict — powerful yet baffling — means the immediate burden falls on PayPal to teach habitual use rather than just enable transactions.
- Product director Hill Ferguson's smoothie demo puts PayPal in direct point-of-sale competition with Square, whose territory PayPal's 2012 mobile scanner already targeted.
Second-order effects
- Rivals in in-store mobile payments must now match a bundle that merges payment, deals, and account management in one app — pushing competition toward who can make checkout simplest, not most capable.
- Merchants become the swing constituency: accepting PayPal at the counter only pays off if consumer adoption sticks, so retailers face pressure to back whichever wallet their customers actually open.
Third-order effects
- If Barrett's password-death thesis holds, wallets like this one evolve from payment apps into identity layers — whoever controls the trusted device handshake controls the checkout relationship.
- A pattern of redesign-and-relearn cycles (2010's app, 2012's wallet blueprint, this release) points toward mobile payments consolidating around a few platforms whose UX clarity, not feature count, decides the winner.
The trend: Mobile wallets are racing to replace the physical card at the point of sale, with PayPal betting that bundling payments, deals, and new authentication into one app beats focused rivals like Square.