This Day On The Street
Continue to site
ADVERTISEMENT
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

Is Starbucks Cooling off PayPal? (Update 1)

Updated from 12:20 p.m. EST to provide analyst comments regarding the deal in the third paragraph.

NEW YORK ( TheStreet) -- Starbucks (SBUX - Get Report) and Square teamed up to bring Square's services to Starbucks locations, but there's just one issue. Starbucks already has a relationship with PayPal.

PayPal, owned by eBay (EBAY - Get Report), is already used in Starbucks' mobile app. Customers can also add their credit cards to the app should they wish to pay with this option as well.

Morgan Stanley analyst Glenn Fodor opines that this deal might be "mixed to negative" for PayPal, as the future of the relationship between the two companies remains murky. "This could have been a great partnership for PayPal/PayPal Here," Fodor wrote in the report. However, he does mention that it would take a while for for Square to take a "PayPal-like 'ach'" strategy (ACH stands for automated clearing house).

"Furthermore, if PayPal's experience is any indication, it takes a long time to transition consumers off the 'rewards-oriented' rails of traditional networks," Fodor noted in his report.

PandoDaily reports that Starbucks actually approached Square after rejecting every other mobile payment player. The article doesn't mention PayPal by name, but Starbucks' new deal with Square could affect its relationship with PayPal.

Shares of eBay are off 1.6% in late Wednesday afternoon trading to $44.88, while shares of Starbucks are close to flat at $45.31.

Interested in more on eBay? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
EBAY $27.25 0.00%
SBUX $55.63 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs