PayPal is excited by major shift towards mobile payments

The "omichannel around the mobile phone", being used online, in-app and in-store, has come to the forefront this year and mobile-payments technology is completely changing the way people think about paying, according to PayPal CEO Dan Schulman. More people are shopping directly within mobile apps rather than going to retail stores and even when they do, they are increasingly using mobile payments instead of cash. US consumers spent more than $11.4bn through mobile web and apps in Q3 2015 alone, according to BI Intelligence. This is all good news for PayPal. The company's sole focus on digital and mobile payments, believes Schulman, is what differentiates the company and gives it a competitive advantage. Its product offerings include the core PayPal online service; Venmo, the peer-to-peer app; and Braintree, the processing service that powers technology for apps inlcuding Uber, Airbnb and Pinterest. PayPal saw 40% year-on-year growth in mobile transactions last quarter, while over a billion transactions, a quarter of the total, came from mobile last year.

PayPal CEO Dan Schulman. Business Insider

PayPal CEO Dan Schulman says that the emergence of mobile-payments technology, including in-app and in-store payments, has really started to take shape this year, completely changing the way people think about paying.

"Everyone's saying this is the year that really what they call 'omnichannel around the mobile phone' — being used online, in-app, in-store — is coming to the forefront," Schulman said at Business Insider's IGNITION conference on Wednesday.

That means more people are now shopping directly within mobile apps as opposed to going to retail stores, and even when they do, they're starting to consider the use of mobile payments instead of cash. That's also enhancing the overall shopping experience because retailers can now send coupons or promotions based on past shopping records.

"What we need to do as an industry is to think about a world that is dominated by mobile and software," Schulman added. "We need to think about how do we reimagine the management and movement of money in an era where everyone will have a smartphone."

PayPal, for example, saw 40% year-on-year growth in mobile transactions last quarter, while over a billion transactions, or a quarter of the total, came from mobile last year.

In fact, mobile commerce hit an all-time high in the US in 2015, with Americans spending more than $11.4 billion through mobile web and apps in the third quarter alone, according to BI Intelligence. A recent comScore report said that 60% of US consumers online used mobile devices to interact with retailers, while the time spent interacting with retailers on smartphones nearly doubled over the past two years.

Schulman says that PayPal's sole focus on digital and mobile payments is also what separates it from other competitors, like Square, which draws most of its revenue from the card-swiping devices it sells to merchants.

PayPal's product offerings are all centered around digital payments. It includes the core PayPal online service, but also Venmo, the popular mobile peer-to-peer app, and Braintree, the processing service that powers the payments technology for apps like Uber, Airbnb, and Pinterest.

"We're one of the very few companies who is so focused on digital and mobile payments. It gives us a tremendous advantage with that focus," he added.