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August 20, 2015

PayPal bags Obama campaign CTO in mobile commerce push

After spinning off from eBay, payments firm seeks growth in ecommerce.

By Jimmy Nicholls

PayPal nabbed the chief technology officer of Barack Obama’s presidential re-election campaign on Wednesday, as it bought a mobile commerce start-up in its first purchase after splitting with eBay.

Founded in Chicago in 2012, Modest is headed up by Harper Reed and Dylan Richard, both of whom worked on Obama’s campaign in 2012, with Reed as the chief technology officer and Richard as an engineer.

Their campaign built on a 2008 effort that pioneered the use of big data elections, taking Obama from an outside contestant to the White House in a strategy that has since been widely emulated in other elections.

As part of PayPal, Modest will contribute to the payment firm’s inroads into an ecommerce market shifting as a result of increasing smartphone use.

Central to Modest’s strategy is the use of buttons which let people buy products through non-commerce apps without having to be redirected through a web page, in what PayPal terms "context commerce".

"Contextual commerce is an exciting opportunity for PayPal, representing a new frontier for commerce that is rapidly growing," said Bill Ready, head of merchant and next-generation commerce at PayPal.

"The acquisition of Modest will help us do amazing things in this area, faster than ever before."

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In adopting buy buttons PayPal will join the ranks of Facebook, Pinterest and Twitter, with the social networks seeking to broaden their revenues away from a traditional reliance on advertising.

Ready said merchants would be able to contextual commerce channels to promote "seamless, simpler, and safer ways" to make purchases.

Whilst Modest is PayPal’s first purchase since spinning off from eBay, the payments firm bought Xoom, which specialises in money transfers, for $890m (£570m) earlier this summer.

Terms of the Modest purchase were not revealed.

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