To answer the above the question, first we need to explore why other technologically advanced P2P payment systems such as the Near Field Communications (NFC), is not likely to take roots in the US. The NFC mobile payment systems is an emerging standard, and it requires infrastructure installation at Point of Sale (POS). And like any new technology, the costs are very high in the beginning. However, to promote this standard, NFC systems must not only be adopted at the institutional end (POS, Banks etc) but also at consumer end (cost of NFC handset/behavioral change). So why will the merchants and consumers do that? They wont, especially when other forms of payment are extensively available and entrenched. So in the developed countries such as the US, where credit card and other electronic forms of payment exist, NFC infrastructure and phones is very unlikely to take off. In the US,where the mobile phone trends are clearly by the iPhone, I wonder if Apple will ever make an NFC phone, (I dont doubt their ability to make one though). Obviously, PayPal Bump is positioned to meet the consumer demand for P2P mobile money transfer, yet without having to go through the no-go route of establishing new technology infrastructure and standards. One aspect must be made clear here: PayPal already has a P2M (peer to merchant) mobile money transfer system; Now, the new hep PayPal Bump has greatly increased visibility among the consumers.
Looking at Bump, I feel Bump's growth strategy must be strongly directed towards making Bump a platform for various applications that has a P2P use - digital lending, music renting, contact exchange, file transfer, photo sharing; each of these application eventually has a monetization aspect, and PayPal Bump could be the integrated tool to complete the financial transaction. Sure, other services for P2P money transfer such as Square are available, but having an integrated payment system that gets completed in the same products/services transfer loop, is very attractive. Users need not use different platforms for transfer of a music file, and payment for the transfered music file.
So if Bump charges a transaction fee, then it would be costly for PayPal to use Bump. But if Bump emerges the standard for a sticky, hep and attractive P2P transfer platform for the Gen Y and Z, it will make sense for PayPal to acquire Bump, and integrate their payment system with the P2P transfer services.
