PayPal Buys Development Firm To Help Improve Its Mobile Wallet App

PayPal, the eBay-owned Web and mobile payments giant, has acquired Duff Research, an app development company, to help continue to develop PayPal's digital wallet app, which didn't fare too well during a recent pilot test.

The announcement of the Duff buyout came from James Barrese, PayPal's CTO, on the official PayPal blog on Wednesday. "This talented team of engineers will be joining the PayPal technology team to help us build creative and simple ways for our customers to use the PayPal digital wallet," Barrese wrote.

Test Didn't Go As Planned

The move comes after a trial of PayPal's existing mobile wallet didn't go as planned. In a pilot during December at the Garden State Plaza Mall in New Jersey, customers were given a $10 incentive to try out the app at participating retailers such as Eagle Outfitters, Jamba Juice, Nine West, Champs, Aerie, and Foot Action.

However, many customers were confused about how to use the app and store managers had trouble answering their questions. In the end, hardly any customers took advantage of the app after the trial was over, according to a report in the retail and e-commerce trade publication StorefrontBacktalk.

As of the end of 2012, PayPal had mobile wallet partnerships in place with 23 national retail chains. In January, PayPal announced five more partners.

PayPal is positioning its mobile wallet as a better alternative to NFC-based solutions such as Google Wallet and ISIS, which require retailers to install NFC point-of-sale hardware.

Enter Duff

Enter Duff Research. PayPal's acquisition of Duff is clearly aimed at helping to enhance PayPal's mobile wallet app, and Duff possesses experience working with leading brands, with apps like TiVo and adidas miCoach on its resume.

Meanwhile, Duff Research is hiring. "We're always looking for creative, new talent," according to a blurb on the home page of Duff's Web site. "We are also currently hiring user experience designers, graphics designers and experienced mobile app testers. Come and help Create Duff's next Top 25 hit!"

Financial terms of the deal were not disclosed.