Earlier this month, online money transfer company PayPal announced a new partnership agreement with fellow business giant Discover Financial Services to provide their service to merchant locations. The deal will see PayPal become a valid means of payment in over 7 million retail and business locations across America.
The agreement is massive both in terms of size and relevance. PayPal has been a pioneer in internet payment and have long shown interest in moving their knowledge and goodwill towards mobile payment. A partnership with Discover, whose cards are accepted in an incredible 95 per cent of locations where either MasterCard or Visa credit cards are accepted, provides scale and volume immediately.
The move towards mobile payments is clearly heating up as more and more people have come to rely on their mobile devices for a multitude of things that they do. Most people are more than comfortable conducting online banking from their favourite device and transferring money to make payments would not be far removed for the majority. In fact, the mobile payment business has such vast potential that Twitter co-founder Jack Dorsey started up Square, who we have covered on occasion and are big fans of. Square also recently signed an agreement with Starbucks (TQ was on it), which was the first major deal in the industry.
This news however is something much bigger. There are already 50 million PayPal users spread across the U.S., creating with Discover a mobile payment network that has millions of users and locations already under their banners.
Beginning in April of next year, merchants who accept Discover cards will begin to accept PayPal charge cards as well as mobile phone payment done through manual entry of phone number and PIN into a payment terminal. PayPal already has hardware partnerships with many of the companies, meaning the transition and growing pains should be minimal and the earnings potential colossal.
SOURCE: AllThingsD
PHOTO: 4-Traders
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