PayPal acquires mobile platform provider StackMob so developers can build more payment-friendly apps
PayPal is showing that it's serious about supporting developers. Today, the company announced that it has acquired mobile platform StackMob in a move that will bolster its efforts …
Context & Ripple Effects
StackMob is the third mobile-capability acquisition PayPal has made public since its 2011 mobile-wallet purchase signaled the strategy, following last year's card.io deal (camera-based card scanning bought in July 2012). The pattern is deliberate: rather than building mobile infrastructure in-house, PayPal keeps buying the layer it needs.
The timing is pointed. PayPal reported a 91% year-over-year jump in Thanksgiving 2013 mobile shopping, launched a digital gift store two weeks ago with Apple as sole launch partner, and in September took reviewer heat for a wallet app that was powerful but confusing. Buying a mobile backend platform shifts the fight from PayPal's own app quality to other developers' apps.
First-order effects
- StackMob's developer customers now have a payments company as their platform vendor, meaning PayPal can push its checkout and money-transfer APIs into the default toolchain every StackMob-built app ships with.
Second-order effects
- Competing mobile backend providers must now decide whether to partner with a payments processor or watch a payments-funded rival bundle settlement into platform pricing, pressuring standalone fee models.
Third-order effects
- If PayPal keeps acquiring its way down the mobile stack, payment acceptance becomes an embedded feature of app development itself rather than a merchant-side integration, concentrating access-layer power in whoever owns the developer relationship.
- The acquisition-by-acquisition approach also signals that PayPal expects the mobile wallet battle to be won in third-party apps, not just its own consumer product — a structural bet on where transaction volume originates.
The trend: Payments companies are buying their way into the mobile development stack, treating developer platforms as the new distribution channel for transaction volume.