eBay Inc (EBAY): The Making of A Payments Powerhouse

The PayPal-Discover partnership was a great victory for both the companies. Discover is increasingly trying to gain market share, and will be adding more than 122 million PayPal customers, while competing with major credit card companies like Visa and American Express Company (NYSE:AXP). The partnership will aid both the companies to gain substantial amounts of incremental payment volumes and earn more ‘swipe fees’.

Competition for Digital Wallets

PayPal has its eyes set on being the go-to digital wallet, and has been striking up partnerships with many retailers. These digital wallets will enable customers to pay online and on mobile devices through a variety of payment methods. However, many big names like Google Inc (NASDAQ:GOOG) Wallet, Visa Inc (NYSE:V)‘s V-Me are also jumping onto the digital wallet business. Competition for the digital wallets is expected to heat up, as PayPal’s offline initiatives are eating away at the market share of debit and credit card issuers.

The Takeaway

eBay provides a great platform for conducting Consumer-to-Consumer business. In addition, to eCommerce, and financing, PayPal has become a major player in processing payments around the globe. With the launch of PayPal Here and its strong partnership with Discover, the total number of payments processed by the company will shoot up significantly.

The company is in pole position to capitalize on the secular trend of increase mobile usage for making and receiving payments. Clearly, eBay will be a major force to reckon with in the payments business in the near and distant future.

The article The Making of A Payments Powerhouse originally appeared on Fool.com and is written by Ishfaque Faruk.

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