This Day On The Street
Continue to site
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

PayPal Fires Back in Mobile Payments War (Update 1)

Updated from 10:17 a.m. EST to provide comments from company spokesman in the fourth paragraph and analyst comments in fifth paragraph.

NEW YORK ( TheStreet) -- The mobile payments war is white hot, with PayPal firing a shot at Square in the race for counter space.

PayPal, owned by eBay (EBAY - Get Report), announced a deal with Discover Financial Services (DFS - Get Report) to bring PayPal access to the 7 million merchants across the country who take Discover, starting in the second quarter of 2013. This comes just two weeks after Square announced a deal with Starbucks (SBUX - Get Report) to let customers pay with Square's app at the coffee behemoth's 7,000 U.S. locations.

Discover Payment Services President Diane Offereins noted that the PayPal deal will bring innovation to the space. "This initiative will result in real change and innovation for the industry by bringing new technologies to the point of sale that benefit merchants and PayPal customers," she said in a press release.

The Digital Wallet's Future Is Now

Consumers will be able to pay with PayPal's wide variety of services, including credit cards or PayPal's app. With more than 50 million users in the United States, PayPal has signaled it's not going down in the mobile payments war without a fight. Adding Discover's merchant network is another sign that mobile payments are coming, and they're coming soon. PayPal is giving out PayPal-branded credit cards to consumers to quickly drive adoption, explained a company spokesman, in an email to TheStreet. Over time, however, PayPal anticipates that people will move to the card-less model.

In a research note, Barclays Capital analyst Anthony DiClemente explained that the Discover deal will continue to drive PayPal's ubiquity on the more than 40 million payment terminals across the globe. He rates shares "equal-weight" with a $44 price target.

PayPal already has deals with well-known retailers, most notably Home Depot (HD), Abercrombie & Fitch (ANF) and a host of others, as the San Jose-based payments provider continues to drive adoption of its services. Signing a deal with Discover further proves this point.
1 of 2

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DFS $54.83 -0.58%
EBAY $23.81 0.04%
SBUX $56.25 -0.25%
AAPL $93.24 -0.41%
FB $117.81 -0.21%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs