Why Did PayPal Buy Fig Card? Find Out

The word is that once upon a time, eBay’s PayPal tried to buy Jack Dorsey’s Square. Knowing Dorsey’s ambition, it was obvious that wasn’t going to work out. What was clear though – PayPal knew that it had to get a piece of the non-web transaction business and jump on the big “people-to-people economy” trend that is starting to gain traction.

Today, the company announced it’s buying small Boston-based mobile-payment startup Fig Card, who’se founders Max Metral and Hasty Granbery will go to work for eBay’s Paypal division.

The FigCard frames itself as “a new way to use your fancy iPhone to pay for things”– (note – you can also use your fancy Android and select fancy Blackberry). Consumers download the app and use it at participating retail stores. Merchants accept the mobile payments in stores through a $5 USB device that plugs into the cash register or point-of-sale terminal. The cashier never sees the customer’s credit card number.

The acquisition fit’s into Paypal’s strategy to acquire  existing technology and talent to help build it’s mobile and platform businesses. In a blog post announcing the deal, Peter Chu, PayPal’s senior director of mobile, local and new ventures said Fig Card fit Paypal’s vision of a future that not separates payment from the PC.

We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal – in the future,  transactions can be as smart as a computer and not as dumb as paper. We won’t need our physical wallets. We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy.

Keith Rabois, who runs Square and was a key executive during the pre-eBay days at PayPal recently told us his company was “going after 26 million folks who are not merchants in a classic sense.” I guess, so does PayPal.