This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

eBay Is Doubling Down on Payments

Stocks in this article: EBAY AAPL NCR INTU

NEW YORK ( TheStreet) -- The last time I wrote about eBay (EBAY), there were concerns about its long-term growth potential and management's ability to harvest value.

I wasn't suggesting that the company was struggling, but it was clear to the Street that PayPal, eBay's dominant person-to-person payment service, was been doing all of the heavy lifting, growing 30% in the most recent quarter.

On Sept. 26, eBay decided it needed to protect that golden goose and picked off payment services system Braintree for $800 million.

We can't say whether eBay overpaid, because Braintree is a private company and we can't get a comprehensive look at its financials.

We do know, however, that Braintree processed more than $12 billion in transactions per year, which is more than what rival Square is reported to have processed.

One thing that made Braintree attractive was that one-third of its transactions were mobile payments.

eBay has been working hard to build its own mobile payment capabilities and inked a deal earlier this year with NCR (NCR), which specializes in point-of-sale technology. The agreement allows for NCR's systems to integrate with PayPal's mobile services, which will enable customers to pay for goods and services using smartphones.

The deal will also present PayPal users the option of using NCR's Convenience-Go app at gas stations and convenience stores. Essentially, eBay's management has gone to great lengths to guard PayPal from emerging mobile threats ranging from Square to accounting software giant Intuit (INTU), which is gaining traction with its GoPayment system.

Although PayPal has grown to interoperate with multiple financial networks around the world, the question, is to what extent Braintree can convince the Street that PayPal can become a long-term viable POS system.

I'm not suggesting that PayPal doesn't already work. But a person-to-person transaction is different from a purchase at Lowe's (LOW) or McDonald's (MCD).

To say it another way, I believe PayPal needs to see significant uptake and conduct more transactions in the realm of large retail operators if it wants to prove its worth. This is where buying Braintree became a no-brainer, pun intended.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,688.55 +331.68 1.91%
S&P 500 2,046.83 +33.94 1.69%
NASDAQ 4,723.6640 +79.3520 1.71%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs