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PayPal to Enter Daily Deals Market

Offers expected to draw on customer data and Where technology.

Groupon and LivingSocial will have to move over next year to make room for PayPal, as the payment processor ventures into daily deals.

PayPal is expected to start offering deals in the first quarter of 2012, though no exact date has been mentioned. The company says its deal offers will be—unlike other daily deals—tailored to its customers’ likes and buying habits.

Scott Thompson, PayPal’s president, tells reporters PayPal will use knowledge the company has about its more than 100 million customers to send tailored coupons for top retailers to their mobile devices as they pass by participating shops. PayPal is expected to use Where, a recommendations engine that gives customer suggestions on dining, entertainment and exclusive deals based on their location, for its daily deals.

Thomas did not specify which retailers the company will partner with for its daily deals. But, according to news reports, PayPal is working with more than 200 retailers.

“The experience is going to be completely different than anyone else’s, through and through,” he adds.

Experts say it will be tough for PayPal to compete in the daily deals market, as Groupon and LivingSocial had 73 percent of the market in October, according to news reports. However, for PayPal, the venture is a risk worth taking. The daily deals market is expected to be worth $4.17 billion by 2015.

About the author

Olga Munoz
Olga Munoz is editor of TheOnlineSeller.com. In addition to writing news and feature articles about e-commerce, selling trends, online marketing and other topics of interest to online sellers, Olga manages the site's social media efforts. A journalism graduate of Chico State, Olga says her favorite part of being a journalist is learning interesting facts that help put stories into perspective, attending industry events and meeting interesting people "that leave you smiling, even in tough situations." Opinions expressed here may not be shared by The Online Seller and/or its principals.



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