PayPal Ready for Discover Deal to Kick In

Press enter to search
Close search
Open Menu

PayPal Ready for Discover Deal to Kick In


SAN JOSE, Calif.-- A new point-of-sale payment option is ready to take the United States by storm as PayPal's partnership with Discover Financial Services will officially kick in on April 19.

By the end of this year, PayPal is expected to be accepted in approximately 2 million retail outlets that already accept Discover cards.

Whether consumers will accept the mobile wallet payment method, which requires them to input a mobile phone number and PIN number, as opposed to simply swiping a credit or debit card, is certainly up for debate.

"Consumers need to be convinced they need a single digital wallet or card that links to all their other cards," Rick Oglesby, a payments industry analyst at Aite Group, told Reuters. "That's a huge mindset shift and the average consumer wonders why they would need it."

As CSNews Online previously reported, PayPal has tested its mobile wallet payment technology in most of The Home Depot Inc. stores since last year. But cashiers at the home improvement retailer told the news outlet that few customers choose to use PayPal and those who have often given up "because they found keying in a bunch of numbers was not as convenient as swiping a credit card."

Brian Kilcourse of RSR Research told the news source he has received similar feedback from his local Home Depot store. "Unless there are specific benefits that consumers can touch and feel, they're unlikely to adapt to something new."

In response to consumer concerns, Don Kingsborough, vice president of retail services for PayPal, told Reuters that his company will update its smartphone application (app) to make it easier to enroll in the program, as well as issue physical PayPal cards to users who prefer to swipe.

"An average credit card user uses the card 18 to 20 times a week," Kingsborough noted in an interview. "For us to get to those kinds of levels will take time. But by [this] Christmas, PayPal will start to become a more prevalent way to play."

PayPal also faces plenty of competition in the mobile wallet space from companies including Merchant Customer Exchange (MCX), Isis, Google and Square.

San Jose-Calif.-based PayPal, a division of eBay Inc., first announced its partnership with Discover in August.