eBay Inc (EBAY), Discover Financial Services (DFS): Why Can’t We Be Pals?

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I’ve recently moved from my home way out in the country to one that’s a bit closer to town. While country living was great most of the time, it was kind of a pain when we needed to go shopping. With almost a 30-minute drive to get to a grocery store or shopping center, the closest place that we could go for general shopping was a Dollar General Corp. (NYSE:DG) store that was around 12 minutes away.


On one trip to the Dollar General Corp. (NYSE:DG) to pick up a couple of things, I noticed an option that I hadn’t seen before while checking out. Right there on the screen of the card processor was an option to pay with eBay Inc (NASDAQ:EBAY)’s PayPal service in addition to credit or debit card payments. While I have a PayPal debit card that I would use if I wanted to pay directly from my PayPal account, I thought that it was an interesting option to see and decided to do a bit of checking up on it.

Lots of new friends

It seems that PayPal has been making a number of new pals. Beginning in The Home Depot, Inc. (NYSE:HD) stores in 2012 and then expanding to Office Depot Inc (NYSE:ODP) and several other retailers, PayPal is expected to be an accepted payment option in over 2 million physical retail stores before the end of 2013. In addition to the retailers that have already been mentioned, PayPal is also an option at RadioShack Corporation (NYSE:RSH), Barnes & Noble, Inc. (NYSE:BKS), Foot Locker, Inc. (NYSE:FL), Toys “R” Us, J.C. Penney Company, Inc. (NYSE:JCP) and other retailers. By the end of the year, a total of 50 retailers will accept the payment option including Burger King Holdings, Inc. (NYSE:BKC) and Nordstrom, Inc. (NYSE:JWN).

All of this wouldn’t be possible without Discover Financial Services (NYSE:DFS), though. Discover Financial Services (NYSE:DFS) is the partner that brought PayPal into the stores, processing payments and signing agreements with merchant acquirers such as Total System Services, Inc. (NYSE:TSS) and Heartland Payment Systems, Inc. (NYSE:HPY) to expand PayPal’s reach even more. Discover Financial Services (NYSE:DFS) is said to have direct relationships with approximately 1,500 retailers in the US, giving the company additional leverage in negotiations to bring PayPal into the physical retail space.

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