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) --


is not going to let


win the

mobile payments war

without a fight. Now it's upped the ante, by strengthening its partnership with

Discover Financial Services

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, raising PayPal's in-store presence to more than 2 million merchants by the end of the year.

PayPal is now currently accepted in 250,000 with the help of Discover, and could reach more than 2 million by the end of the year. "With Discover's help we are poised to grow from the 250,000 retailers who accept PayPal in store today to more than 2 million by the end of 2013," said Don Kingsborough, vice president of retail services at PayPal in Tuesday's

press release.

"As consumers continue to use technology to shop in new and exciting ways, we will continue to collaborate with Discover's acquirer partners to support the growing needs of their merchants."

Square has taken the mobile payments world by storm, and has been in the public spotlight since announcing a

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last year. However, PayPal, and others aren't just letting Square take the ball and run with it.

PayPal already has deals with well-known retailers, most notably

Home Depot

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, and the continued expansion of the Discover deal shows the San Jose-based payments provider is serious about driving adoption and increasing usage from its 55 million-plus domestic users.

PayPal recently announced "Log in with PayPal," allowing users to log in with their PayPal credentials so they don't have to fill in shipping and payment information on mobile devices. This is similar to what


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have done with their log-in credential services.

The mobile payments industry is still in its early stages, as evidenced by recent comments from


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CEO Tim Cook on Apple's recent earnings call. "I think it's just getting started and just out of the starting block." The payments space is still in its infancy, and PayPal is certainly doing whatever it can to win the fight, and importantly, market share.

By positioning itself in more than 2 million merchants, with an ultimate goal of over 7 million, PayPal is doing what it can to make sure it doesn't go down without a fight.


Written by Chris Ciaccia in New York

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