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.
In eBay's July quarter, management said it expected to do $20 billion of mobile commerce and payment volumes this year. Braintree already does one-quarter of that on an annual basis, the company has a strong list of places where its mobile payments are accepted, including Opentable ( OPEN), Rovi Heroku, TaskRabbit and several others. It's also no coincidence that Braintree's impressive growth has paralleled the declines of traditional payment systems from the likes of VeriFone ( PAY) and Ingenico. eBay's management deserves plenty of credit here for seizing an opportunity to build on the cash powerhouse that PayPal has already become. But I don't believe it's time to rest. If Apple ( AAPL), with its fingerprint technology, picks off Square soon, it will be game over for PayPal. As brilliant of a move it was to acquire Braintree, eBay's management will have plenty of other decisions to make. Not the least of those will be which companies it should buy next. Square has to be at the top of the list. As with Braintree, Square makes it easy for small businesses to accept credit cards without installing a high-fee terminal. And given that Square is estimated to process close to $5 million worth of daily mobile transactions, which average close to $2 billion per year, it's another no-brainer. At the time of publication, the author held no positions in stocks mentioned. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.