In order to further expand its mobile payment business,
e-commerce service provider
) PayPal has signed a deal with
NCR specializes in point-of-sale (POS) technology and hardware
and its customer base includes 38% of the top 100 U.S. restaurant
chains and 50% of the major retail chains.
Under the partnership, PayPal mobile service will be
integrated with NCR's POS technology, enabling customers to pay
their bills at restaurants using a smartphone. Additionally,
PayPal's mobile payment options will be integrated into a couple
of more NCR product offerings, including NCR's Convenience-Go
(C-Go) app for gas stations and convenience stores. This will
allow shoppers to buy fuel and food, and pay for car washes using
Getting PayPal's mobile services accepted in places like
restaurants, gas stations and convenience stores will
considerably increase the company's mobile payment volume going
forward. The NCR deal will increase PayPal's addressable market,
improving PayPal's competitive position against rival mobile
payment systems such as Google Wallet, Isis, Square and
This week, PayPal unveiled similar agreements with a chain of
gas stations and a grocery store operator. PayPal's point-of-sale
technology is gaining a lot of traction as the company has
already established partnerships with 23 reputed brands, of which
12 have agreed to accept PayPal as a payment mode. Last August,
the company signed a deal with Discover Financial Services,
enabling PayPal users to make payments at retail stores and thus
extending its services to 7 million merchant locations.
As smartphone migration continues, eBay is seeing great
opportunities in the mobile space. PayPal's installed base
includes 117 million accounts worldwide and it expects to process
$10 billion in mobile payments this year.
Aided by growth in its PayPal business and mobile commerce,
eBay recorded a strong quarter with earnings of 49 cents
exceeding the Zacks Consensus Estimate. eBay's PayPal
remained the star performer, generating total payment volume
(TPV) growth of 2.1% and 20.1%, respectively from the previous
and year-ago quarters.
We believe that eBay is taking all the necessary measures to
ensure continued growth in mobile payment in the near future.
Both Payments and Marketplaces are showing improving trends
compared with the year-ago quarter, indicating its changing
Though eBay's payment business shows great promise, competition
may be expected to pick up as banks and other companies announce
their own payment systems and
) digital wallet gathers steam.
Currently, eBay shares carry a Zacks Rank #2 (Buy).
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