Wednesday, January 25, 2012

Home Depot to add PayPal as a payment method

Just saw this on the news this morning (Motley Fool, video on line).  I think this is something we might see more of in all types of stores.  PayPal is, in some ways, better than a credit card.  I like the ease of viewing transactions on their website, and since it knows where to mail things, checkout for on-line purchases is much faster. And in my opinion, more secure.

Also, if a remodeling contractor was doing some cost-plus work, with the owner paying for material, the owner could open up a quick PayPal account for that job, and let the contractor charge at various stores (assuming all stores would take the card or the password) and the owner could follow the costs on line very easily.  The charges would not be mixed up with other credit card purchases.  And in the end, the PayPal payment would be one lump sum on their credit card bill.  Making it easier, at tax time, to see exactly what the remodeling cost was.  In fact, Motley Fool said that the remodeling contractor could charge something with only a phone number, not even the plastic card or whatever else PayPal uses.

Motley Fool felt the PayPal was a shot in the arm for the stock (that might be a stretch).  They also expect housing is at the bottom, and will go nowhere but up.  HD stock has done great for the past few months.  The old adage was that stock movement predicts future economic conditions. So maybe this is some indicator that buyers are slowly accumulating HD stock in hopes of an increase in profits to come.

By contrast, all the HD stores I go to are empty and I don't see much going on at all.  Same for Lowes stores.  And the cash register lines -- only one was open the last 4 times I went for furnace filters or something.   Yet, all the books say each store does $30 million a year.  I don't see how they reach this number with the tiny transactions I see moving through the cash registers when I am "in store" doing retail research.

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