eBay CEO John Donahoe announced this morning that David Marcus, the former CEO and founder of mobile payments startup Zong and PayPal Mobile VP, will be taking over as PayPal’s president. As you may know, former president Scott Thompson departed PayPal in January to be Yahoo’s CEO. Marcus joined PayPal last year when the payments giant acquired Zong for $240 million. Marcus stepping into the top spot at PayPal is not particularly surprising considering his extensive experience in the mobile and payments world, but it’s interesting that eBay chose a Silicon Valley startup entrepreneur (as opposed to an exec with large company experience) to lead its crown jewel.
We had a chance to chat with both Donahoe and Marcus about the next era of PayPal under Marcus’ leadership. Donahoe explains to us “David is the right guy for the right time at PayPal. PayPal is on the cusp of an enormous opportunity and David is a product visionary,” he says. “He knows how to create beautiful product experiences, and can match that with PayPal’s scale.”
Marcus is best described as a serial entrepreneur. He started his first company, GTN telecom, in 1996 in Geneva, Switzerland, which was acquired by World Access in 2000. That same year, he founded Echovox, a mobile media monetization company that helps large media companies connect with their mobile audiences. Zong, which was spun out of Echovox, offered a mobile payments platform that let you pay for items online via direct billing to your mobile phone. When PayPal acquired Zong last year, Marcus became VP of mobile for the eBay-owned company.
While at PayPal for the past seven months, Marcus spearheaded the creation, design and launch of PayPal Here, a Square-like mobile payments hardware and software platform for small businesses. He’s also worked on PayPal’s new Wallet product, set to debut later this year. And PayPal has also been hard at work on an in-store payments technology for big box retailers, which has been adopted nationally by Home Depot.
“David is going to focus on how to weave the consumer experience into these technologies,” Donahoe adds.
In his new role, Marcus says he will continue to use his past as an entrepreneur and product exec to bring a valuable consumer experience to PayPal’s mobile and web products. ”We are going to spend time and focus on the product and consumer experience,”Marcus tells us. “We need to produce an amazing user experience for consumers in payments.”
Part of this will be focusing on innovating in mobile and adding new products to the lineup, he says. Last year, the company processed $4 billion in mobile payments transactions and expects $7 billion in mobile payment volume in 2012. He’s also betting on the soon to be launched digital wallet, which he explains will be able to add all forms of payments and stored value to a cloud-based wallet.
“I believe in one thing with payments—shopping is fun, payments are not,” he says. “We need to continue to innovate in mobile and web payments online and offline and remove friction wherever we can.”
Challenges are still aplenty for PayPal. Square, Google, and many well-funded startups like Jumio are vying for pieces of the payments pie both in terms of mobile and the web. But Marcus’s experience as a nimble entrepreneur is going to help the company continue to move fast, he says. He points to the fact this trend is already happening at PayPal with PayPal Here, which was built in 7 months. “The entrepreneurial spirit is strong at PayPal and the organization is nimble despite what people think.”
Besides working on product innovation around the consumer experience, Marcus is also making design a major focus. “Design is very important for everything going forward at PayPal and we are making sure to hire fantastic designers,” he says. “Beauty needs to be everywhere, even in a payments product.”
For PayPal Here specifically, the company is hard at work on expanding the mobile payments service for small businesses internationally. Marcus added that the merchant response to the launch of the product has been “tremendous.” And in its first day of availability, PayPal was seeing 1,000 new registrants per hour for the new service.
For PayPal, Marcus could be a breath of fresh ‘entrepreneurial’ air. Matrix Partners’ Dana Stalder, who was the former CTO of PayPal and was on Zong’s board of directors says that the appointment of Marcus is a sign that the company is looking to innovate in the next frontier of payments. “David is cut from the entrepreneurs’ cloth; he’s an incredible product person, has a deep passion for customer experience, and is not afraid of rolling up his sleeves,” Stalder says.
In the end, it’s clear that PayPal’s success in mobile payments and the digital wallet will come down to execution, customer experience, design and scale. Clearly, Marcus has his work cut out for him but considering his success as an entrepreneur so far, he may just be the man for the job.
PayPal is an online payments and money transfer service that allows you to send money via email, phone, text message or Skype. They offer products to both individuals and businesses alike, including online vendors, auction sites and corporate users. PayPal connects effortlessly to bank accounts and credit cards. PayPal Mobile is one of PayPal’s newest products. It allows you to send payments by text message or by using PayPal’s mobile browser. PayPal created the Gausebeck-Levchin test, which is an implementation...
Founded in 1995 in San Jose, CA, eBay connects millions of buyers and sellers globally in the world’s largest online marketplace, utilizing PayPal to ensure secure transactions. The company also operates specialized marketplaces such as StubHub, the world’s largest ticket marketplace, and eBay Classifieds sites, which together have a presence in more than 1,000 cities around the world. eBay items can be sold either via a silent auction, in which users input the maximum price they are willing to...