PayPal Mobile Payment Trial Tripped Up By Lack Of Training

As retailers struggle with how to get shoppers to try mobile payments, PayPal has been experimenting with different approaches. Last month, for example, PayPal set up a booth at a very large New Jersey mall and offered shoppers $10 to try its mobile payment system. But the trial ran into the same issues that have tripped up so many mobile trials: lack of associate and store manager training; an approach that made it awkward for some shoppers (already rushed during December holiday shopping at an extremely crowded mall) to get the incentive; and no reason for customers to try it again after the promotion.

The trial at the 2.1 million square foot Garden State Plaza (about 300 stores) involved six chains and managers at each of the stores discussed the trial, on the condition of anonymity. The chains involved were American Eagle Outfitters, Jamba Juice, Nine West, Champs, Aerie and Foot Action (part of the FootLocker chain). On the plus side, all of the stores reported that some shoppers tried using the app. On the down side, far from all of them were able to do so.

PayPal is arguably getting the most traction from its mobile payment efforts and certainly has the largest footprint among major chains. Google Wallet, after a promising launch, has slowed way down. ISIS was late in launching its only trial and its retail partners are small. And MCX is still a year or two away from any serious usage.

But PayPal is still running into the challenges of any new technology, mostly getting shoppers to change their behavior.

The trial ran into a practical problem, as one booth was set up in the middle of the very-spread-out mall, with no physical presence in any of the participating stores. The process involved shoppers leaving the booth, going to a participating store and then having to come back to the booth to get their $10. The stores that were farther away from the booth suffered the most, but the question remained why a presence in the stores wasn't attempted.

That way, people who already wanted to shop at, for example, Jamba Juice, could be given the incentive in the store. They could then get the incentive without having to walk all the way back. Then again, that could be part of the test, to see how much shoppers would go through to get $10. A marketer might want to know if anyone opted to go to one of these stores solely because of the mobile trial.

There was also some question about the nature of the incentive, but PayPal seemed to get that one right (other than the incentive being a lot smaller than it needed to be). One store manager said his shoppers would have been much more motivated had it been a percentage off, rather than a static $10. Given that it was a PayPal—rather than a retailer—trial, PayPal couldn't have guaranteed to pay the shopper a specific percent of whatever they chose to buy. It was unlikely that PayPal was getting a percentage of any trial-fueled purchases (beyond the usual PayPal fee).

One shopper who participated in the trial said the lack of restrictions on the incentive were baffling, as someone at the booth suggested buying shoelaces for $2 and then profiting $8. But that's not a hole in the system. The $10 was to get people to use the mobile app and, if they did, PayPal should have cared what was purchased. (From a bigger picture perspective, it would have been nicer if shoppers made large purchases, because that would have given PayPal more evidence to convince other retailers to join.)

One store manager said his store saw a lot of customers using the mobile app, but stressed that his store was right near the PayPal booth. "It was a one-minute walk," the manager said.

The promotion only lasted through Christmas Eve. When asked how many shoppers had used the PayPal app after the promotion ended, he said, "Not that many. Hardly any."

The biggest consistent point for many of the managers was a lack of understanding of how the PayPal mobile app worked. That meant that when customers had questions, they couldn't help.One manager said some shoppers tried doing returns of purchases they had made with the PayPal app, but he didn't know how to do that. Instead of crediting the money back to the card, he just issued store giftcards. That manager said he understood that a different PIN was needed for returns than for purchases. But that's not the case.

The manager at another of the participating stores said bluntly that no customers—who came into the store wanting to get the $10—were able to complete it while she was on duty, because she didn't understand the process herself. If they insisted on PayPal, they were told they needed to use the card and not the mobile app.

The manager at another participating store said she appreciated the booth sending some traffic to her store, but it didn't seem to help PayPal. "A lot of those guests did come to the store and a lot of them could access their PayPal account," the manager said. "But they were having a lot of difficulty with it, so they all just paid" with cash or Visa or MasterCard.

That manager added that all of the customers who tried it were from either Europe or Asia. "The people who used it were tourists. Two of them didn't speak our language," she said.

That manager said she and a few associates had been given training on the PayPal system.

She also expressed concern about the distance from the booth. "We're on the other side of the mall. You'd have to walk around two wings. That's a little too far to walk" for $10, she said.

But it wasn't simply a matter of laziness. "Realistically, if I was a guest, I'm kind of like the average consumer," she said. "We're so far away. They walk around the mall and, by the time they get to us, who knows if they even remember (the PayPal promotion). It's December, and there's all the hustle and bustle."

On the one hand, December at a huge mall in New Jersey is a great time and place to test products. But it's also the worst time, in the sense that shoppers are extremely distracted and have 30 other things on their mind.

One of the participating stores said that "no one" came into the store to get the discount, and this manager wasn't even aware PayPal had run such a promotion. "No one has used (PayPal) at all this month," she said in mid-to-late January.

Another store manager said explicitly: "We weren't told about the promotion." About "five or six" shoppers did try the trial in December, she said, but no one has tried in January. As for training, she added, "I don't know how it (the PayPal mobile app) works."

This trial raised some interesting issues. Despite these merchant-identified hurdles, a healthy number of customers tried it. That's a good sign. But the intent behind these efforts is to show people how easy and intuitive these mobile payment apps are, with the hope being that shoppers will then start using it on their own without the bribes.

This trial seemed to send the opposite message: without someone trained in the app standing by to help, the mobile apps were anything but intuitive, if the number of shoppers who had trouble is a good indicator.

Fortunately, this is an easily fixed problem, given marketing dollars and training attention. The bigger issue, though, is whether shoppers will ultimately embrace this payment method. Will they like it? Will they find it valuable? Although some retailers are finding evidence that PayPal mobile payment should be compelling to shoppers, initial indications are that this trial did little to make that case.