PayPal: Banks' Old Frenemy Makes Further Inroads at the POS

Forget about fledgling payment companies that are popping up every other day, the biggest threat to card-issuing banks these days appears to be PayPal.  The cash-cow division of eBay currently owns 60 percent of online payments and new deals have it working with Discover and other merchant partners to aggressively expand its presence at the point of sale.

And it’s making inroads: Last week TSYS announced that it would process PayPal point of sale payments made through Discover merchants, joining Vantiv, Heartland, WorldPay, Global Payments and others who are already on the bandwagon. (For the record, First Data, the top merchant processor, is the biggest holdout.) PayPal is also making its own deals with merchants like Home Depot, Abercrombie & Fitch and more than a dozen other national chains to accept PayPal at the point of sale. The company is also talking to smaller merchants in language they can really relate too---offering no fee transactions for a certain period of time for those who install PayPal’s point of sale solution.

Industry analysts are mixed on what this means for banks—with some suggesting that banks may soon want to become ‘issuers’ of PayPal similar to Visa and Mastercard, and others saying that PayPal’s ever-increasing presence creates an urgency for banks to speed their mobile payments plans into action.

Want to hear more about how MasterCard, Visa and American Express are responding to competitive pressures? Wondering how merchants are feeling about the changing landscape?

Join us at ATM, Debit & Prepaid Forum for these timely sessions:

Network Showcase

MCX: Who, What, Why, When and How?

The Future of Payments

Will Retailers Ignite Mobile Payments at the POS?

The Evolution of Person-to-Person Payments

 --The ATM, Debit & Prepaid Team



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